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Revised ACA premium calculator could up uninsured rate


 

Federal health authorities have proposed new ways to calculate premiums in Affordable Care Act health insurance exchanges and new rules on coverage of abortion services – changes that critics caution could leave more people uninsured.

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But the Centers for Medicare & Medicaid Services says the changes would lower premiums and give enrollees the option to choose a plan that doesn’t offer abortion services.

The CMS released the proposed rule online Jan. 17, and it’s expected to be published in the Federal Register Jan. 24. (A fact sheet highlighting the changes can be found here.)

Under one of the proposals, the CMS would alter the risk-adjustment model used to determine premium growth beginning in 2020.

But the proposed rule’s regulatory impact statement notes that the risk-adjustment change could reduce enrollment in health insurance products through the federal exchanges by 100,000 people in each of the years from 2020 through 2023. And the revised risk-adjustment model could reduce federal spending on premium tax credits by $900 million in both 2020 and 2021, and by $1 billion in 2022 and 2023.

“Some of the 100,000 individuals estimated to enroll in exchange coverage as a result of the proposed change ... may purchase short-term, limited-duration insurance, though a majority is likely to become uninsured,” the CMS stated in its proposed rule. “Either transition may result in greater exposure to health care costs, which previous research suggests reduces utilization of health care services.”

Matt Fiedler, fellow at the Brookings Institution’s Center for Health Policy, highlighted the potential effect a drop in premium tax credits could have on potential enrollees.

According to Mr. Fiedler, a single person at 300% of the federal poverty level (FPL) would lose $92 per year in premium tax credits. And a family of four at 300% of FPL would lose $189 per year in premium tax credits, he calculated. He predicted “smaller effects at lower income levels and larger effects at higher income levels.”

The proposed rule would also require issuers of qualified health plans that offer abortion services to provide at least one “mirror” plan that omits abortion coverage. That could lead insurers to drop abortion coverage in their qualified health plans, the CMS noted, but it didn’t estimate how many issuers are expected to drop abortion coverage.

The agency said the proposed requirement “would increase consumer choice by offering additional plan options to potential enrollees who may refuse to enroll in, or may be discouraged from enrolling in, qualified health plans because the plans in their service area cover non-Hyde abortion services.” The CMS conceded that the existence of two such plans could confuse consumers, and “research has shown that offering consumers additional health plan options may result in consumers opting to not purchase a plan at all.”

The CMS also is seeking comment on changes to the automatic re-enrollment policy.

“Most current enrollees receive significant government subsidies, making them potentially less sensitive to premiums and premium changes,” the agency stated in the proposed rule. “Some consumers who are automatically re-enrolled in their current plan may be shielded from changes to their coverage, which may result in consumers being less aware of their options from year to year.”

Comments on the proposed rule are due by Feb. 19.

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