The federal government finalized a rule on Friday that requires health insurers selling plans on the Affordable Care Act exchanges to send enrollees a separate bill for the portion of premiums that go toward abortion coverage.
Additionally, the rule ramps up oversight of the federal and state-run health exchanges to ensure patients receiving federal subsidies are eligible. The CMS said the rule is meant to save taxpayer dollars and better inform individuals about their coverage. But experts have argued—and the CMS has acknowledged—that the changes would impose significant burdens on insurers and their customers.
"Our healthcare programs, including the exchanges, are evolving rapidly, and our program integrity efforts must keep up," CMS Administrator Seema Verma said in a statement. "Today's final rule drastically improves our ability to pay it right—to make the right payment to the right plan for the right people. The Trump administration will spare no effort to ensure that taxpayer dollars are only going to those truly eligible."
The rule, first proposed in November 2018, requires health insurers to send and plan members to pay an entirely separate monthly bill of at least $1 for premiums attributable to certain abortion services for which public funding is prohibited, effective June 27, 2020. Insurers will send another bill for premiums associated with all other healthcare services, and plan members will pay that bill in a separate transaction.
"Healthcare is complex enough as it is. Requiring people to pay two bills for one product — health coverage — is a non-solution in search of a problem," said Margaret Murray, CEO of the Association for Community Affiliated Plans, which represents safety-net plans. "This misguided rule will only succeed in introducing confusion to the marketplace on a massive scale, and put millions of consumers at risk of losing their coverage."
Murray added that rule could prompt insurers to stop offering coverage for abortion services.
The CMS acknowledged in its final rule that the new process could confuse plan members, who could lose their insurance if they don't pay the separate bill for abortion coverage. The agency said it will address that risk in future rulemaking. Until then, it won't take enforcement action against an insurer that doesn't terminate a plan member's policy for nonpayment.
The CMS estimated that complying with the rule would cost an insurer a one-time expense of $2.7 million in 2020. Collectively across all insurers, the cost will total about $385 million for nearly 3 million hours of work. That doesn't include ongoing annual costs of about $1.1 million per insurer, or $100.2 million across all insurers.
The three state-based exchanges that perform their own billing and payment processing will also incur millions in costs per year. The CMS estimated that about 3 million individuals were enrolled in exchange plans that covered non-Hyde abortion services in 2019.
Beyond the changes concerning payment for abortion coverage, the rule steps up CMS oversight of state-based exchanges to make sure states are correctly identifying people eligible for premium tax credits and cost-sharing reduction subsidies. It clarifies the scope of audits that the state-based exchanges are already required to conduct each year, adding a new requirement that state exchanges must test enrollment and eligibility transactions.
The rule also states that beginning in 2021, federal and state exchanges must perform "periodic data matching" at least twice a year to ensure they are identifying individuals who have become eligible for other coverage that bars them from receiving federal subsidies.
"Early identification of eligibility and enrollment issues is particularly important for consumers who are eligible for or enrolled in other coverage because it can minimize the time these consumers inadvertently receive tax credits that they will have to pay back later, and mitigate risks that they are not paying premiums for a plan they no longer need," the CMS said in a fact sheet.