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Health Insurance Rules Changing Quickly Prior to Open Enrollment and Medicare Plans. What Should You Do?

The Center for Medicare and Medicaid Services is out with a slate of new changes to the Affordable Care Act in 2020, with lower user fees and out-of-pocket limits the biggest priorities.

What ACA rules are changing and how will consumer be impacted? Here’s an early look at what the CMS is proposing, with the following proposals at the top of the “new rules” list:-

  • Health care plan user fees will be curbed from 3.5% to 3.0% on the federal exchange, while statewide fees will fall from 3% to 2%. “This follows the first ever 1.5% drop in average ~premiums for plans selected through for the 2019 coverage year,” the CMS reports. 
  • The CMS is also hiking the maximum out-of-pocket limit to $8,150 for individuals and $16,300 for families. “This represents an approximately 3.16% increase above the 2019 parameters of $7,900 for self-only coverage and $15,800 for other than self-only coverage,” the CMS states.
  • Uncle Sam is also cutting the amount ACA plan subsidized enrollees are required to contribute toward benchmark silver plans to 8.24%
  • The CMS is also clearing the way for insurers to block drug manufacturer coupons from applying to annual out-of-pocket limits if a generic version of the drug is available.

That means pharmaceutical firms can now offer consumers coupons to opt for a drug company’s brand name drugs even when a similar, less-costly generic medication is available, the CMS states.

 “This rule allows issuers to stop applying the value of these coupons towards an enrollee’s maximum-out-of-pocket costs in situations where a generic medication is available and medically appropriate, in order to encourage generic use and result in lower drug spending,” the agency notes. 

  • The new rules also enables the CMS to “more easily suspend or terminate agents, brokers and web-broker that violate applicable Marketplace requirements” and who fail to remain in compliance and who don’t “protect sensitive exchange data and systems.”

Industry Response to the New Rules 

The changes to the health care rules aren’t exactly wholesale, or without controversy. Yet on the whole, heath care experts say the CMS is heading in the right direction. 

“The changes to the 2020 ACA include lowering drug prices and funding to provide states to make their own online healthcare exchanges,” says Jared Weitz, chief executive officer at United Capital Source Inc., a financial services firm that works with small businesses, in Great Neck, New York.

According to Weitz, one of the most debated changes is the band of surprise medical billing.

“This would require all hospital providers and labs to be “in network”, would establish a standard baseline for physician pay and would use external arbitration to resolve any disputes higher than $750,” he says. “The draft also has a large focus on drug pricing which includes action to stop manufacturer gaming exclusivity periods and promotes generic medication.”

Another noteworthy change is to ensure patients obtain estimates of their out-of-pocket costs within two days of a request and furthermore. “This means consumers will  receive bills within 30 days of a procedure, otherwise they are not required to pay,” Weitz says. 

Good News/Bad News for ACA Consumers?

Other health care experts say the new rules could bend both ways for most Affordable Care Act users, but only around the edges.

“The changes announced by CMS for the 2020 Affordable Care Act Plans will likely help some people who buy health insurance through the ACA’s Health Insurance Exchanges, while hurting others,” says Dr. David Prescott, an assistant professor and the Director of the Health Administration and Public Health program at Husson University, located in Bangor, Maine. “In general, it’s probably fair to characterize the changes as relatively minor modifications compared to previous efforts to dismantle the Affordable Care Act.”

, or the amount that people pay each month to have health insurance, are targeted to decrease for many plans.

 “This is due to the reduction in a fee charged to insurance companies that offer programs through the Health Insurance Exchange, which is typically passed on to consumers,” Prescott says. “Put simply, if the insurance company doesn’t get a reduction in one of their fees, the hope is that they will pass that reduction on to people who buy the insurance.”  

Another change announced by CMS will decrease the overall amount the federal government pays to help subsidize premiums for people who struggle to afford health insurance on the Exchange.

that could be a problem for some consumers, Prescott says.

“While some individuals may experience little change, others may find that the government helps less than previously with the monthly cost of health insurance,” he notes. “The overall dollar amount set aside to help people afford health insurance is getting smaller.”

The federal government is also playing something of a shell game with the new rules, too.

“While many health insurers have tried to keep monthly premium costs down, the overall cost of healthcare continues to rise,” Prescott says. “The changes announced by CMS address that problem by increasing the out of pocket costs that consumers pay when they receive healthcare.”

“Most insurance plans have an out of pocket maximum – the most a person or family will have to pay in a year for covered healthcare,” he adds. “The CMS changes increase this out of pocket maximum; so while monthly premiums may be the same or less, the amounts not covered by health insurance during a year may end up being more.”

Exchange Volumes Eyed

The reforms could be viewed as a balancing act by CMS to try to keep major insurance carriers in the Health Insurance Exchanges, while keeping the plans affordable for people who don’t have health insurance through their employer, Prescott says.

“Experts suggest that the changes are most likely to have the impact of reducing the number of people who have health insurance through the exchanges,” he says. “In the bigger picture, the parts of the ACA that were largely responsible for more people becoming insured will remain intact through the implementation of these changes.”

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