A closer look at the CMS decision to suspend risk adjustment payments

Earlier this week, the Trump administration announced it would be suspending more than $10 billion in risk adjustment payments to issuers. Since then, several issuers and analysts have come out against the decision, saying CMS had several other options it could have taken.  

According to the Centers for Medicare & Medicaid Services (CMS), the hold is due to a March court ruling and pending litigation. The case involved New Mexico Connections, a consumer operated and oriented plan (CO-OP), which sued the Department of Health and Human Services (HHS) over an alleged flaw in the calculation that favored larger issuers. The presiding judge, James Browning, ruled that HHS’ formula was not illegal but should be re-examined. A previous court ruling in Massachusetts upheld the federal program.  

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New Jersey becomes second state to institute an individual mandate for health coverage

Shortly after announcing that the state will manage its own health insurance exchange for the 2019 Open Enrollment, New Jersey Governor Phil Murphy signed into law a bill enacting an individual mandate.

The bill, signed yesterday, requires all New Jersey residents to have health insurance coverage or pay a penalty. Democratic lawmakers drafted the bill in response to Congress’ decision to appeal the federal mandate established in the Affordable Care Act.

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New York SHOP program removes online enrollment & premium billing

Starting this month, NY State of Health (NYSOH) made several changes to the state’s SHOP program in an effort to give the federal tax credit to as many small businesses as possible.   

In New York, 98% of businesses have fewer than 100 employees and over 40% of the workforce is employed in these small businesses. The recent changes impacting these businesses were allowed through the November 2017 rule that allows small employers to enroll directly through issuers and brokers and still receive the small business tax credits.  

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Iowa gov. expected to sign off on legislation allowing some health plans to avoid Affordable Care Act mandates

This week, Iowa senators approved controversial legislation that would make certain health plans exempt from Affordable Care Act mandates. If signed into law, the bill would have a significant impact on the way many Iowans receive health coverage.

The legislation, approved in a 37-11 vote, combines two proposals that would do the following:

  • Allow the Iowa Farm Bureau Federation to partner with Wellmark Blue Cross/Blue Shield to offer an association health plan to qualifying participants
  • Allow multiple small businesses to band together to provide health coverage for their employees under plans that would not be regulated by the state insurance commissioner or subject to ACA rules and regulations.

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Stakeholders are in standby after DOL’s proposed association health plan regulation comment period

After the end of the Department of Labor’s (DOL) comment period for its planned expansion of association health plan eligibility, the healthcare community awaits a decision.  

The regulation would broaden access to AHPs by allowing employers to form an association on the basis of geography or industry, instead of only industry, trade, or professional association. It would also allow sole proprietors to join AHPs. According to a recent Avalere Health analysis, the proposed rule would have the following impacts 

  • Higher premiums for individual and small group – Premiums are projected to rise in the current individual (2.7% – 4%) and small group (0.1% to 1.9%) markets, relative to current law. This would be largely due to healthier employees shifting to AHPs  
  • Increased number of uninsured – An estimated 130k to 140k individuals will become uninsured, mostly due to increasing premiums in the individual market as healthier individuals move to AHPs.   
  • Additional 2.4M to 4.3M enrolled in AHPs – This represents members switching from the individual market (0.7M to 1.2M) and small group market (1.7M to 3.2M) into the expanded AHPs.   
  • Lower premiums for AHPs – Premiums in the new AHPs are projected to be between $1,900 to $4,100 lower than the yearly premiums in the small group market and $8,700 to $10,800 lower than the yearly premiums in the individual market by 2022. 

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Proposed regulations could see 4.3M new members for Association Health Plans

proposed rule from the US. Department of Labor (DOL) could lead to a significant increase in the number of members enrolled in Association Health Plans (AHPs) and, in turn, decrease membership and increase premiums for individual and small group markets. 

Currently, AHPs are health insurance arrangements sponsored by an industry, trade, or professional association that provide health coverage to their members. These offer an alternative to small businesses and individuals who are part of a larger industry or association. However, due to the current limitations – individual enrollees who are sole proprietors and small employers who are engaged in a specific trade or business – many people are not eligible to participate in AHPs.  

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