New Special Enrollment Roadblocks for Consumers: Hindering, not Helping Consumers Get Coverage

The Trump administration has made various policy changes related to special enrollment periods (SEPs) for marketplace coverage. These went into effect on June 23, 2017. The administration made these changes at the behest of insurance companies, who complained that consumers enrolling through marketplace SEPs had higher health care costs than those who enrolled during the open enrollment period.

Now, when a consumer tries to enroll in a plan through a SEP, he or she will be required to verify the life event that qualified them for the SEP. The rules also tighten eligibility for SEPs for certain common qualifying events such as loss of minimum essential coverage and marriage. Additionally, marketplace enrollees that qualify for a SEP now have a more limited set of plan choices than they did under Obama-era rules. Each policy change is summarized below, along with the potential impact on consumers.

Further tightening SEP eligibility: Loss of minimum essential coverage and marriage

The administration is tightening SEP eligibility for people who lose minimum essential coverage (MEC) or get married. Specifically, for people who lose MEC because they failed to pay their premiums, new rules allow the insurer who is due outstanding premiums to reject the enrollment of such individuals unless they pay the premiums due for their previous coverage. Consumers living in an area with only one insurer would not be able to switch carriers to avoid paying any past premiums; many could be priced out of coverage entirely. This could result in adverse selection because healthy people will be less likely to enroll if they can’t afford the extra premium payment.

Under the marriage qualifying event, the new rules require at least one spouse to prove that they have had continuous prior coverage before they can gain eligibility for a SEP, similar to the requirement for the permanent move SEP.* Requiring “continuous prior coverage” in order to enroll through a SEP for marriage and for a move differs from widely accepted rules in the employer market.  There is also no “continuous coverage” requirement for off-marketplace health plans. Having such a requirement disadvantages lower income consumers who must buy through the marketplace in order to obtain premium subsidies and cost-sharing reductions.

Limiting “exceptional circumstance” SEPs

Currently the marketplace can provide a SEP for individuals who experienced “exceptional circumstances” such as medical emergencies or natural disasters that prevented them from enrolling during the open enrollment period. Under new rules, the administration indicates it will apply a “rigorous test” for this type of qualifying event, although it has yet to provide guidance on what this means, except to indicate that the circumstances must be “truly exceptional.” The administration has stated it may require consumers to submit verifying documentation. Without further clarification, however, Navigators and consumers are likely to be confused about what “rigorous test” and “truly exceptional” mean; this confusion could deter some eligible individuals from applying.

Prohibiting enrollees from changing metal levels through a SEP

The new rules prohibit marketplace enrollees who become eligible for a SEP from switching to a plan in a different metal level than their current plan. For example, if a marketplace enrollee has a baby, under prior rules she would be entitled to a SEP not only to enroll her baby into coverage, but also to select a new plan that better meets the needs of a growing family. The new rules allow the enrollee to add the baby to her current plan or enroll the baby into a separate plan at any metal level; she cannot select a new metal level for the family. There are a few exceptions to this new limitation on enrollee choice. If an enrollee has a change in income or household size that makes them newly eligible for cost-sharing reductions, they can switch to a silver plan in order to take advantage of the cost-sharing subsidies. Additionally, the new limits do not apply to individuals who are eligible for a SEP because a marketplace error prevented them from originally enrolling into their preferred plan. They also do not apply to American Indians.

Overall, the changes to SEP policy and operations are significant. Rather than increase choice for consumers, these changes could effectively limit choices for people seeking marketplace coverage.  In addition, without an accompanying communications strategy to inform consumers about these policy changes, and proposed cuts to the marketplace outreach and enrollment budget, these changes are likely to cause confusion among consumers who may qualify for marketplace coverage outside of open enrollment.

*In lieu of continuous coverage, individuals applying for a SEP due to marriage or permanent move may also qualify if they can demonstrate that they lived outside the U.S. for at least one day during the 60 days prior to the marriage or move.

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