ACA Rule Changes Could Lead to Coverage Confusion, Industry Leaders Warn

Bo Ryall, CEO of the Arkansas Hospital Association, says hospitals continue to struggle in the aftermath of the pandemic. (Steve Lewis)

Proposed changes to the administration of the Affordable Care Act could be a blow to several health care industries, from hospitals to insurance agents.

In March, the Centers for Medicare & Medicaid Services issued the Marketplace Integrity and Affordability Proposed Rule, which recommends changes to the health insurance marketplaces, as well as changes affecting health insurance issuers, brokers and agents who enroll people in Affordable Care Act coverage.

CMS said in a news release that the proposals provide “additional safeguards to protect consumers from improper enrollments and changes to their health care coverage, as well as establish standards to ensure the integrity of the Marketplaces.”

Critics say the changes will make it more difficult for people to obtain health insurance coverage through the ACA.

Bo Ryall, president and CEO of the Arkansas Hospital Association, noted that people without health insurance aren’t prevented from receiving health care. “They’re still coming to the hospital in the emergency department setting, which is very costly to the entire health care system,” he said.

The hospitals then must absorb the costs of treating uninsured patients. “So with the financial implications of some of these changes, it could really hurt rural hospitals and every hospital, if people lose coverage,” Ryall said.

Hospitals continue to struggle financially from the fallout from COVID-19. “Margins have not returned to the levels that we saw prior to the public health emergency,” he said.

Meanwhile, the proposed changes also could impact insurance agents and agencies, said Adam Van Fossen, vice president of growth for HealthSherpa, the nationwide company that runs a website that touts itself as being an “easier way to shop for and enroll in ACA plans.” Van Fossen, who is based in North Carolina, said most insurance agents use the company’s website to enroll clients in the ACA. He said the company is neutral on the proposed changes.

CMS proposals also include a shorter enrollment period. The annual open enrollment period for all individual market coverage will run from Nov. 1 through Dec. 15 preceding the coverage year, instead of through Jan. 15 of the coverage year, CMS said.

Van Fossen said the CMS recommendations are numerous and complicated. “There’s a chance here for people to not really understand these rules, and therefore people to get kind of lost in the shuffle,” he said.

Insurance agencies make their money by receiving a commission on enrollments, and as long as that consumer stays enrolled, year after year, agents will continue to collect commissions, Van Fossen said. The proposed rules will make “renewals a lot more arduous, so they have the potential to lose some of their existing membership, and therefore their revenue will decrease.”

In addition to the rule changes, Congress also is examining the subsidies for health insurance bought through marketplaces that are set to expire at the end of the year.

“If Congress renews them, then you will still see this large segment of the American population that will qualify for a $0 plan,” Van Fossen said. “But if Congress decides to not renew them, then you will see a bunch of people move from that $0 plan that they’re on today to a plan that costs them some amount of money out of pocket in order to maintain the same level of coverage.

“And so that has huge impacts, not just for new people coming into the ACA, but also for renewals,” he said.

For example, he said, someone who is receiving health insurance at no cost and who then has to pay a premium might decide not to be covered.

He said the decision on subsidies is pending and there are Democrats and Republicans who support extending them.

The Congressional Budget Office found that not extending the credit “will increase the number of people without health insurance and raise the average gross benchmark premiums for plans purchased through the marketplaces,” according to its Dec. 4 report.

“None of these changes are finalized yet,” Van Fossen said.