Something as simple as the exact rules for when consumers can and cannot sign up for health coverage could have a big effect on the flow of health claims risk and on what commercial health insurance costs.
Representatives from the National Association of Health Underwriters (NAHU) and the Council of Insurance Agents & Brokers (CIAB) make that argument in separate comment letters submitted in response to draft Patient Protection and Affordable Care Act (PPACA) implementation regulations that the U.S. Department of Health and Human Services (HHS) published in November 2012.
If PPACA takes effect on schedule and works as drafters expect, it will give individuals and small groups the ability to buy coverage through new exchanges, or Web-based insurance supermarkets, by Oct. 1. Exchange plans are supposed to offer four "metal levels" of coverage: Platinum, gold, silver and bronze.
PPACA also will prohibit health insurers from considering personal health information when deciding whether to issue coverage to an applicant, and it will put tight limits on use of personal health information when insurers are setting health rates.
Health insurers can charge the oldest insureds 3 times as much as they charge the youngest, and they also can use some premium-based penalties and rewards in connection with wellness and condition management programs, including tobacco cessation programs.
PPACA will require many individuals who fail to have coverage to pay a tax, but health policy specialists say the tax will be so low that it will be much cheaper for many individuals who do not have group coverage to pay the tax rather than buying their own coverage.
Jessica Waltman of NAHU -- a group that represents agents and brokers in both the individual and the group markets -- covered a wide range of topics, including coverage for consumers with serious health problems, small group rating considerations and the new age rating limits in the NAHU letter.
Ken Crerar of CIAB -- a group that focuses on representing producers in the group market -- focused mainly on the PPACA guaranteed-issue provisions, or provisions that restrict insurers' and plans' efforts to control risk by limiting access to coverage.
Waltman suggested in the NAHU letter that regulators should recognize that they have "inherent discretion" in using PPACA enforcement powers in ways that will help hold down the cost of coverage and keep PPACA from disrupting the individual and small group health insurance markets.
The administration should phase in enforcement of requirements, such as the premium rating rules, over at least three years, especially in states like Delaware and Pennsylvania that now have much different rating rules, Waltman said.
Similarly, states should be able to keep the high-risk pools that now serve consumers with health problems that make buying conventional health coverage difficult open for at least three years, to minimize the possibility that PPACA will disrupt those consumers' coverage and lead to big fluctuations in claims at commercial health insurers, Waltman said.
In a discussion of the PPACA coverage availability provisions, Waltman talked about the importance of thinking carefully about "open enrollment" period timing, to avoid encouraging consumers to game the system.
Many health policy specialists have argued that letting consumers buy health coverage on a pure "guaranteed issue" basis can drive up the cost of coverage, by giving relatively healthy consumers a financial incentive to wait until they are very sick to buy and pay for health coverage, then drop the coverage if and when they recover.
Some policy specialists have discussed the possibility that insurers could prevent that kind of "free rider" problem by establishing "open enrollment" periods when any customer could buy health coverage.
At other times, an uninsured customer could not buy coverage, or could buy coverage only if the customer had some obvious reason for deciding to buy coverage, such as getting married, getting divorced or having a child.
HHS has talked about setting an Oct. 1-Jan. 1 "open enrollment" period for individuals but letting small groups sign up for coverage year round. Individuals would get "special enrollment period" opportunities when they went through events such as the loss of employer-sponsored benefits, or when an individual encountered "exceptional circumstances."
One concern is that HHS should make sure the shift to any new open enrollment period rules includes transitions for individual consumers in states with different open enrollment period rules, Waltman said.
Another concern is that some individuals will still try to be free riders, even if HHS establishes Oct. 1-Jan. 1 open enrollment periods for individuals, Waltman said.
"If individuals do not maintain continuous coverage and instead waive coverage and pay the individual mandate penalty only to seek insurance when they are ill or injured, the adverse selection and cost impact on the marketplace will be enormous," Waltman said. "We would recommend the imposition of late enrollment penalties in the individual market similar to those used currently for Medicare beneficiaries."
The CIAB is concerned that, within a group health plan, or within the health insurance exchange system, a worker could game the system by shifting from one metal level of coverage to another rather than by doing without coverage altogether.
A worker with cancer could switch to Platinum coverage in January, recover in July, then drop down to Bronze coverage in October, Crerar said.
"The CIAB has significant concerns that this could destabilize the employer-sponsored coverage market, especially if the employer opts to offer coverage to its employees through a [small business] exchange," Crerar said. "If the employer offers coverage to its employees at a certain level, but employees can switch to a higher tier of coverage when they get sick, which appears to be the case as the proposed rule is currently written, the employer faces increased uncertainty with respect to not only premium contributions but also plan costs and actuarial risks associated with its pool of employees. We ask that HHS explain how it will implement these provisions."
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