Health insurers are pleased the Trump administration wants to give them seven extra weeks to file rates for individual-market plans in 2018.
But that move does little to settle their uncertainty about whether to offer plans at all. Their anxiety has been heightened by the Republican drive to repeal and replace the Affordable Care Act and by a pending House Republican lawsuit to block certain payments to insurers. Carriers say they need to know the rules of any new system before they can design plans and set rates.
In a draft notice posted Friday, the CMS said it would revise rate-filing deadlines for all health plans currently selling products on the ACA's exchanges. It's pushing back the deadline for filing applications and rates from May 3 to June 21.
The notice “will likely give insurers more time to sort out some of the short-term uncertainty in the market,” said Margaret Murray, CEO of the Association for Community Affiliated Plans. But, she added, the Trump administration and congressional Republicans need to decide quickly whether they will pay insurers for the ACA's required cost-sharing reductions for lower-income consumers.
To that end, House Republicans filed a joint motion with the U.S. Justice Department Tuesday to delay their legal case seeking to block payment of the cost-sharing reduction funds. If the federal appellate court grants the motion, the parties would have until May 22 to file a status report with the court and establish 90-day deadlines after that.
If cost-sharing reduction payments end, Congress would have to act immediately to appropriate funds or else insurers would have to shoulder the cost. Those federal cost-sharing reduction payments to insurers totaled $4.9 billion in 2015, Murray said.
House Republicans argue that the Obama administration illegally funded the cost-sharing subsidies without a congressional appropriation. But now they are feeling pressure to back off the litigation because it could disrupt the insurance market. So far, however, neither the Trump administration nor congressional GOP leaders have offered legislation to fund the cost-sharing reduction payments.
It's widely anticipated that if the payments cease, many insurers would immediately leave the individual market if their contracts allowed them to do so.
“Their interruption would sow havoc in the marketplaces, and their discontinuation would be an extinction-level event for many qualified health plans,” Murray said.
Until that issue is resolved, the extra time for filing 2018 rates provides little comfort. "Plans are eager to get clarity regarding subsidies for next year,” said Ceci Connolly, CEO of the Alliance of Community Health Plans, which represents not-for-profit insurers. “Without that, it is nearly impossible to develop sound pricing.”
Cori Uccello, a senior health fellow of the American Academy of Actuaries, agreed. “The extended timeframe is less helpful if uncertainty about policymaking continues,” Uccello said.
A key benefit of the rate-filing extension is that it will give plans a chance to review their first quarter performance with enrollees who signed up during the recent open enrollment period, according to a spokesman for the National Association of Insurance Commissioners.
Insurers have said there's too much uncertainty arising from GOP efforts to repeal and replace the ACA for them to decide whether to stay in the individual marketplace, through which nearly 20 million Americans get their insurance. After an exodus of some large commercial carriers such as UnitedHealth Group, remaining insurers have said they wanted to see some changes to bring more young and healthy people into the market and stabilize the risk pool.
Insurers say policymakers must resolve the cost-sharing reduction payment issue and preserve the requirement for individuals to buy insurance. Those, they say, are the key issues determining whether they stay in the market in 2018.
In its notice Friday, the CMS announced it's pushing back other timelines, including the June 13 deadline to correct applications. Insurers now will have until Aug. 2.
The agency will send its final certification notices to insurers by Oct. 12 instead of Sept. 22.
The delay notice was expected given that the Trump administration released a proposed rule last week outlining a number of incremental changes to the individual market.
The CMS is taking public comments on the proposed rule issued last week and on the rate-filing extension. Those comments are all due by March 7.