HHS opens up catastrophic eligibility

The Department of Health and Human Services (HHS) has relaxed several policies to make the transition from the status quo to the Affordable Care Act’s major provisions easier on consumers. Unfortunately, such shuffling has left insurers with the hassle of reworking IT systems and undoing existing operational tasks.

Yesterday, HHS announced that consumers with non-grandfathered plans that face cancellation may now claim “hardship” exemptions or purchase catastrophic plans.

Catastrophic plans were designed for individuals under the age of 30-a group that has generally gone uninsured.

Rob Wilson,  President of Employco USA, says the new exemption is a burden on insurers.
 
“[HHS Secretary Kathleen] Sebelius and the administration assume the exemption will impact about 500,000 people, which is downplaying the exemption tremendously. In reality, this type of change can cause confusion for many individuals and result in consumers reassessing their options,” says Wilson. “While the exemption has the potential to help many Americans who cannot afford the high costs associated with Obamacare, the ultimate impact of such a last-minute change will be instability in the insurance market and scrambling consumers.”

While it’s unclear how many people could qualify for the exemption or the extended eligibility in catastrophic plans, the rule change again causes the risk of significant instability in the marketplace. Insurers have already complied with several about-face changes:

• America’s Health Insurance Plans’ (AHIP) Board of Directors on December 18 announced that plans are voluntarily extending the deadline for consumers to pay their first month’s premium. Consumers who select their plans by December 23 and pay their premiums by January 10 will be able to have coverage effective January 1.

• Several plans also agreed to extend non-grandfathered plans for another year after the Obama administration allowed the extension and encouraged plans and state regulators to allow it.

• Other steps taken by HHS include giving those enrolled in the federal Pre-existing Condition Insurance Plans (PCIP) the chance to extend their coverage through January 31, 2014, if they haven’t already selected a new plan, and encouraging insurers to refill prescriptions covered under previous plans during January.

• Health plans continue to work with HHS officials and contractors fixing up healthcare.gov to improve the transfer of 834 data to ensure individuals who sign up for coverage can be enrolled at the health-plan level.

Federal officials say about half a million people with non-grandfathered plans still have yet to sign up for new coverage plans.