The U.S. Department of Health Human Services has just completed work on regulations that could make big changes in how the U.S. individual health insurance market.
One change will cut the open enrollment period for 2018 in half, to just 45 days. The open enrollment period will now end Dec. 15, not Jan. 31.
Another big change will set tougher rules for how the Obamacare exchange system will verify the eligibility for people trying to buy an Obamacare plan during the special enrollment period. People will have to provide documentation that they have gone through a life-changing event, such as a marriage, that gives them a chance to buy insurance after the open enrollment period deadline.
These changes might help insurers push health people to get covered during the open enrollment period, and it might help them avoid having to cover special enrollment period applicants who were intentionally trying to game the system.
It could also make getting your clients covered more complicated.
Here are five ways the new enrollment rules might force you to come up with new strategies for helping your clients.
1. Mid-Year Coverage Upgrade Problems
John pays for his own health insurance. He has a Bronze plan (less expensive, but less coverage). In January, he marries Sue and soon thereafter Sue becomes pregnant. Because they are newly married, Sue can automatically enroll in John’s plan. But they decide they want better coverage (there is a baby on the way) and so in the middle of the year they switch to a Gold plan.
Under the old rules: Switching healthcare plans in the same calendar year would be allowed.
Under the new rules: Not allowed.
2. Unpaid Health Coverage Premium Headaches
Tim has a variety of part-time jobs at tiny businesses. None of them offer him employer-sponsored health insurance so he buys his own health plan. Of the $400 a month in premium, he gets a subsidy from the government that covers all but $50 a month. Late in the year, Tim stops paying his premiums for the last three months of the year. His insurance is cancelled. A few months later, Tim decides he wants coverage again, and applies for a plan with the same company.
Under the old rules: His insurance company must cover him.
Under the new rules: They can deny coverage until he pays them the back premium for the 3 months in which he was covered but didn’t pay.
3. Moving Documentation Headaches
Sam lives in small town in western Montana. He moves south to Wyoming. His old insurance says his health care providers in Wyoming are out-of-network. Because he has moved outside of his network coverage area, Sam can apply and be accepted for health insurance after his official move date for the next 60 days.
Under the old rules: Sam tells his insurance company that he moved, and his new plan covers him immediately.
Under the new rules: Sam has to submit evidence to the government that he moved to Wyoming and that he’s no longer in his old plan’s coverage area. Sam won’t have coverage until the evidence is verified, and his pending coverage can only be backdated by up to 30 days.
4. Baby Blues
Sydney and Mary adopt a Jessica, baby with special needs, and they want Jessica to have the lowest possible out-of-pocket expenses.
Under the old rules: They simply need to verify Jessica’s birth and change their coverage.
Under the new rules: Baby Jessica must have her own insurance, with a separate deductible and co-pay. Once insured during a calendar year, consumers can’t “improve” their coverage.
5. Strict Deadlines
Natasha likes to wait until the last second. When enrolling for health insurance each year she shops around and often buys on the last day of open enrollment. This year, the last day falls in the middle of Hanukkah. The last day of Open Enrollment is on Friday, Dec. 15. In all the bustle of the season, she forgets to enroll.
Under the old rules: Jessica could still apply for coverage that starts on Feb. 1, 2018 or March 1, 2018, even if she missed the final day to apply in the prior year.
Under the new rules: Sorry, Jessica – one strike and you’re out.
Implications of the New Rules
These changes might help insurers lower their rates about 2%.
They might also dramatically increase consumers’ confusion.
Remember the old saying: Confused people don’t buy. Some consumers (especially the healthiest) will react by not buying coverage at all. Those with health problems will plod through all the new requirements.
Many of the consumers who do still want coverage will need professional help, and, possibly, advice about major medical coverage alternatives, such as short-term health insurance, hospital indemnity insurance and health care discount cards.