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CMS Proposes Regulations to Stabilize Individual and Small Group Markets

On February 15, the Centers for Medicare and Medicaid Services (CMS) arm of the Department of Health and Human Services issued proposed regulations aimed at stabilizing the individual and small group health insurance markets. This is the first proposed rule issued in the wake of President Trump’s Executive Order directing the agencies to modify their interpretation of the Affordable Care Act to the extent permitted by law to make the current system as efficient and as affordable as possible. The press release issued with the proposed regulations states that the proposal will help protect individuals “enrolled in the individual and small group health insurance markets while future reforms are being debated.”

The proposed rule would make changes to the guaranteed-availability rules, annual open enrollment and special enrollment periods for the public Marketplaces, and certain other Marketplace standards.

Perhaps most significantly, the proposal would shorten the individual Marketplace open enrollment period to be from November 1 to December 15 (instead of January 30) beginning with the 2018 plan year. It would also allow insurers to require payment of missed premiums for prior plan years before enrolling an individual in new coverage. On the latter point, CMS cited data showing that – in 2015 – 21 percent of the individuals enrolled stopped paying their premiums at some point during that year and almost half of those individuals reenrolled in the exact same plans in 2016.

There will undoubtedly be significant structural changes to the Affordable Care Act proposed in the coming weeks and months. This set of proposed regulations appears to be an interim step to ease concerns among insurance carriers about participation and stability in the Marketplace.

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