The new short-term, limited duration health insurance policies available during open enrollment cited as a cost driver for premium increases in the individual market.
On Wednesday, the Trump administration announced its final rule allowing the sale of health insurance policies exempt from the definition of individual health insurance coverage under the ACA. Such policies don’t have to cover prescription drugs, maternity care or patients with pre-existing medical conditions. The rule allows consumers to renew the 11-month policies up to 36 months and clarifies that such policies must include language to help consumers understand their benefit coverage. It becomes final in 60 days.
In its Arizona rate review submission, Blue Cross and Blue Shield of Arizona seeks an average rate increase of 0.2%, varying between -14.2% and 41.6% for its individual and family HMO products offered on the exchange in 2019. Last year, BCBSAZ exchange products were available exclusively in rural Arizona, and in this year’s filing the insurer said it expected the short-term policies to cyphon off customers in the individual market when open enrollment begins. In its filing it states,
From 2018 to 2019, we [BCBSAZ] expect that the market membership will decrease due to the weakening of the individual mandate and the proposed changes to Short Term Limited Duration policies. Both CBO and the CMS Office of the Actuary have indicated that these changes will result in some of the “healthier” individuals leaving the IU65 market in 2019, and have quantified the impact of the loss of these members to the premium rates.
In its original press release, CMS projected approximately 100,000 to 200,000 additional individuals would drop an ACA-compliant individual market plan to purchase short-term, limited-duration insurance in 2019.
According to the New York Times, CMS is expecting 600,000 people to buy the new insurance policies next year, with enrollment increasing to 1.6 million by 2022. Only about 10 percent of these individuals would have been subsidy-eligible if they maintained their Exchange coverage. The agency said the rule is designed to provide more affordable options to consumers seeking health coverage,
Short-term, limited-duration insurance is generally more affordable than ACA-compliant plans. In the fourth quarter of 2016, a short-term, limited-duration policy cost approximately $124 a month compared to $393 for an unsubsidized ACA-compliant plan.
The new rule reversed the Obama administration’s regulations that restricted such plan’s to three months without guaranteed renewability and follows the Trump administration’s enthusiasm for increasing the availability of Association Health Plans.
Enrollment on Healthcare.gov begins November 1, 2018
Enroll, re-enroll, or change a 2019 insurance plan.
Enrollment ends December 15, 2018
Last day to enroll in or change plans for January 1, 2019 coverage.
Read the CMS fact sheet on the new rule.
Read more from The Hill
Get a video on the announcement and extra details from Roll Call