Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability

The Department of Health and Human Services has just released a 301-page proposed rule change for the Health Insurance Marketplace. We’ve been keeping an eye on these updates as the Inflation Reduction Act changes, which have benefited our clients for the past several years, are set to change. If you have a spare 8 hours, here’s the full proposal: Proposed New Ruling

Thanks to ChatGPT/AI, here’s a summary of the ruling:

Summary of Changes:

The changes to the Affordable Care Act (ACA) outlined in the document involve several updates to eligibility verification, enrollment processes, and Qualified Health Plans (QHP) standards. Key changes include:

1. Income Verification:

   • The Exchange will accept an applicant's attestation about their income without further verification if the applicant’s income is in certain thresholds (within Medicaid or CHIP standards or when there is a significant difference between projected and actual income).

   • This simplifies the verification process for applicants and allows them to qualify for coverage more easily.

2. Special Enrollment Periods (SEPs):

   • Exchanges will now verify eligibility for SEPs before enrollment. The requirement is that at least 75% of applicants for SEP enrollments are verified for eligibility.

   • If an applicant is not verified, they will not be able to enroll during the SEP.

3. Annual Redetermination:

   • Starting in 2026, there will be more streamlined processes for the annual redetermination of eligibility, with specific protections for enrollees who fail to submit updated applications, ensuring that their premiums are adjusted appropriately.

4. Health Plan and Coverage Standards:

   • Issuers of QHPs will be restricted in what they can include in Essential Health Benefits (EHB), such as routine non-pediatric dental services, non-medically necessary orthodontia, and sex-trait modification.

   • Health plans will be allowed minor variations in Actuarial Value (AV), making it easier for insurers to offer plans that align with legal and regulatory standards.

Impact on Clients:

1. Simplified Process for Clients:

   • Clients will benefit from less paperwork and fewer verification steps, which could ease the enrollment process, especially for those with fluctuating or projected incomes. This can speed up approval and help ensure coverage is maintained with minimal disruption.

   • Clients who are enrolled in plans with certain benefits (e.g., pediatric care, dental, or orthodontia) may find those benefits restricted as these services will no longer be included in EHB after 2026.

2. Protection Against Overpayment:

   • Enrollees who fail to submit applications for updated eligibility in time will have their premiums reduced to $5 if their premium after applying the tax credit would otherwise be zero.

3. Possible Enrollment Challenges:

   • If eligibility for SEPs isn't verified, clients could be denied coverage, which could result in gaps in care for people who might be undergoing life changes or have a special situation that qualifies for an SEP.

Impact on Agents:

1. Streamlined Verification:

   • Agents will experience simplified processes for verifying income and enrollment eligibility, which could reduce the amount of paperwork and back-and-forth with exchanges and clients.

   • Agents will also have more clarity on what benefits are covered under Essential Health Benefits and can help clients make more informed decisions based on updated standards.

2. Increased Verification Duties:

   • Since the exchanges will be required to verify 75% of SEP enrollments, agents will need to ensure that clients' eligibility for special enrollment is correctly documented and supported. If verification fails, clients may lose the opportunity to enroll.

3. Confusion Around Enrollment Windows:

   • Agents will need to track changes in annual redetermination rules and open enrollment periods, especially as the timing for annual enrollment changes after 2025. This may require additional training and monitoring.

Challenges:

1. Verification and SEP Complications:

   • The requirement for pre-enrollment verification of SEPs means agents may face delays or difficulties if the exchange is unable to verify an applicant’s eligibility in time. This could lead to frustrated clients or missed opportunities for coverage, especially for those with urgent or changing health situations.

2. Understanding New Guidelines:

   • With more detailed changes in eligibility requirements and thresholds (like the 75% verification rule for SEPs and the variation in AV), agents will need to stay up to date on the new policies, which may involve additional training and understanding of thresholds, income projections, and exceptions.

3. Limited Coverage Options:

   • The restriction on including non-pediatric dental services, eye exams, and other benefits in EHB might limit coverage options for clients who need these services, creating a gap between clients' needs and available plans.

Abuse of the System:

Currently, the system can be abused in a few ways:

1. False Income Reporting: Some individuals might report inaccurate income or fail to provide correct documentation, resulting in inflated or lowered eligibility for coverage, which can lead to incorrect premium subsidies or qualification for Medicaid.

2. Manipulation of SEPs: Clients who do not meet the qualifications for a special enrollment period could potentially abuse this system, misreporting events that trigger an SEP or failing to provide proper documentation, leading to improper enrollment.

3. Failure to Update Income or Household Information: Clients who do not update their income or household status during annual redetermination could continue receiving benefits that they are no longer eligible for, resulting in improper subsidies or other benefits.

Conclusion:

These changes will simplify many processes, but they may also create new challenges related to eligibility verification, special enrollment period verification, and the restriction of certain benefits. For agents, this could mean a faster but more complex enrollment process, requiring them to adapt to new rules, stay up-to-date with periodic adjustments, and ensure proper documentation for clients. However, these changes aim to reduce the potential for fraudulent activity and make the process smoother for clients who are honest and accurate in their submissions.