Health & Human Services (HHS) introduced new requirements that coincide with the administration’s desire to remove penalties for not having health insurance. This move is meant to help insured to avoid penalties prior to those penalties going away as of 2019.
Specifically, the rules allow a hardship exemption which allows people living in areas where there is only one ACA insurance company and for those individuals who oppose abortions and live in areas where there is only one carrier who covers abortion services. Meaning if you live in one of those areas described above you can cancel your insurance and not suffer penalties for doing so.
It’s a small step in dismantling the ACA. There is a concern among insurance professionals who are not sure of what will happen to the individual market once the penalties are removed for not having coverage in 2019? Will many abandon their insurance (which is a real option for many), which will lead to an unbalanced market where premiums have to rise rapidly? That will happen because the healthy will leave the market and only the sick will remain covered. Thus leading to higher premiums to cover the illnesses.
Also, CMS has issued a rule that allows states to determine the essential health benefits covered in plans sold beginning in 2020. This same rule also allows the states to determine changes to the medical loss ratio (MLR) which eliminates standardized plans beginning in 2019 and allows insurers to increase premiums requiring state review from 10% to 15%. Meaning insurance companies can increase premiums by up to 15% without the department of insurance review.
There doesn’t seem to be a consensus on how to proceed. This blogger believes that each state needs to consider what changes they want and how they want the market to be in the future. There are so many options and I fear that the states are not ready to handle it properly.
In Nevada, the Silver State Exchange gave notice to the federal marketplace that we would not be using them in 2019, or 2020 (It is not clear yet which year).
In light of what happened the first time with Xerox and that disaster, are we properly prepared to move ahead? Do we have the time to do it right? Not sure about that but believe we need to proceed with caution to ensure we don’t have a repeat of previous events.
Many questions, not so many answers yet. Stay tuned as the adventure continues.
The Barend Agency Inc.
Len Barend, broker