Most ACA exchanges have been letting the open enrollment period run until Jan. 15, and some have been letting the enrollment period last longer.
CMS is also trying to reduce misuse of the ACA public exchange premium tax credit subsidy and access to exchange plan coverage through “special enrollment periods.”
CMS says it intends to fight fraud by:
◆ Requiring exchanges to verify 75% of the applicants who ask for special enrollment periods.
◆ Requiring exchanges to cut off premium tax credit subsidies for users who fail to file income tax returns and fail to reconcile the amount of premium tax credits they received, based on income projections made at the beginning of the year, with the amount they should have received, based on actual income.
◆ Shortening the amount of time applicants have to clear up conflicts between what they say about their income and what official data sources show to 60 days, from 120 days.
◆ Adopting tougher standards for banning agents and brokers who appear to be guilty of misconduct, by letting exchanges ban them based on the “preponderance of the evidence,” rather than requiring that evidence show that a producer is guilty “beyond a reasonable doubt” or that there is “clear and convincing evidence” that a producer is guilty.
The packet is the first major set of draft ACA regulations released since Donald Trump was inaugurated as president.
The new draft regulations implement an executive order that instructs “all executive departments and agencies to deliver emergency price relief for the American people and to increase the prosperity of the American worker,” CMS officials say in the preamble, or official introduction, to the packet. “Health care represents a substantial portion of a family’s budget and a tremendous cost to federal taxpayers.”
Officials say they hope to reduce waste, fraud and abuse in the ACA public exchange program; reduce the cost of coverage for exchange users who do not qualify for premium tax credit subsidies; and reduce the impact of the subsidy program on taxpayers.
What it means: For employers and their benefits advisors, the new draft regulations could affect efforts to use small-group exchange plan coverage or help workers with individual coverage health reimbursement arrangements use the ICHRAs to sign up for individual health coverage.
The draft regulations could also have indirect effects on employer plan coverage, by reducing people’s access to individual ACA exchange plan coverage and increasing pressure on workers to get health coverage through their employers.
The backdrop: When members of Congress developed the Affordable Care Act, they banned many of the strategies that issuers of individual health insurance once used to hold down benefits costs, such as rejecting applications from sick people and charging sick people more for coverage.
To compensate, Congress tried to increase the number of young, healthy people in the individual health insurance risk pool by creating the ACA public exchange system — a family of web-based supermarkets for health insurance — and the ACA premium tax credit subsidies.
To discourage people from paying premiums only when they get sick, exchange managers, state insurance regulators and insurers created an “open enrollment period” system, or limits on when people can buy individual coverage without showing they have what the government classifies as a good reason to be shopping for individual health coverage.
In recent years, exchange plan managers have tried to ease application procedures, to make signing up for exchange plan coverage easier.
Paragon Health, a research center popular with Republicans, has shown evidence that many exchange plan users seem to be using the loose income verification procedures to misrepresent their income in an effort to qualify for high levels of premium tax credit subsidies, officials say in the preamble to the new draft regulations.
In nine states, the number of people selecting exchange plans who reported household incomes between 100% and 150% of the federal poverty level, and who received exchange plan coverage without having to pay any cash out of pocket, “exceeded the number of potential enrollees within this FPL range,” according to officials’ summary of the Paragon analysis, which found that the government might have made more than $15 billion in improper subsidy payments on behalf of 4 million exchange plan enrollees in 2024.
The current long open enrollment periods and easy access to special enrollment periods seem to be increasing the odds that new enrollees will be sick without doing much to increase overall enrollment, officials say.
Sex-trait modification: CMS officials have also included provisions in the new draft regulations stating that benefits for helping people correct what they say are the wrong sex traits should not be part of a state’s “essential health benefits” package, or standard benefits package.
One reason is that a state’s EHB package is supposed to be comparable to the benefits packages at the state’s employer-sponsored health benefit plans. The typical employer plan in a state excludes benefits related to changing sex traits, officials say.
The nuts and bolts: The Centers for Medicaid and Services is part of the U.S. Department of Health and Human Services.
Dr. Mehmet Oz, Trump’s nominee to be the CMS administrator, would play a more direct role in overseeing the ACA exchange program. The Senate Finance Committee is preparing to hold a hearing on the Oz nomination at 10 a.m. Friday. His signature does not appear on the packet.
The packet lists three CMS contact people: Jeff Wu, Rogelyn McLean and Grace Bristol.
All three CMS contact people have appeared as contact people for ACA regulation drafts released during the administration of former President Joe Biden.
Comments on the draft regulations would be due 30 days after the official Federal Register publication date.
