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Health Care Open Enrollment: Updates and Changes

A recently proposed rule from the Federal Register, introduces changes to the Patient Protection and Affordable Care Act, which means new benefit and payment parameters for 2020. Provisions impacting both current and future health care and Medicare beneficiaries could affect eligibility, enrollment, and coverage details. Below, is a complete summary of proposed open enrollment changes that will impact policyholders during the next enrollment period.

Health Benefit Exchanges
American Health Benefit Exchanges were established by the Patient Protection and Affordable Care Act (PPACA) to create a marketplace for individuals to purchase coverage. However, over the years, rising insurance rates have made Exchanges unaffordable for many enrollees without advanced payments or premium tax credits. To address these concerns, the PPACA is focusing on developing a more predictable regulatory environment while enhancing the role of states for greater flexibility. Changes in 2020 include:

 - User fee rate reduction — The cost for issuers participating in State-based and Federal Exchanges will be reduced to between 2.5 – 3% of premium rates. The result should make these programs more affordable for consumers.
 - New premium measures — Updates in maximum annual limitations will adjust premium growth rates for 2020 and beyond to control costs to policyholders.
 - Hardship flexibility — An expanded list of hardship exemptions could provide additional flexibility to consumers.
 - More enrollment options — Traditionally, enrollment was only possible through the HealthCare.gov website. Starting in 2020, individuals can enroll in Exchange coverage through third-party sites or direct enrollment entities.
 - Advanced payments — Those who experience a drastic drop in household income mid-year may qualify for a premium tax credit (APTC) advance. A special enrollment period will be available for eligible off-Exchange enrollees.

Read the Centers for Medicare and Medicaid Services (CMS) Health Insurance Exchange Open Enrollment Report for full details.

Health Plan Transparency
Efforts are underway to increase transparency regarding health care data that can help individuals understand their coverage options better. The following changes will make health care more transparent and promote a consumer-driven system.

 - Easily accessible data — A heterogeneous information network will use shared technologies to transfer and access data effortlessly. Interoperability efforts will help reduce duplicate medical services, fraud, waste, health care spending, and costs to consumers.
 - Transparent data collection — Issuers will be required to provide Qualified Health Plan (QHP) holders with clear language details relating to health plan transparency.
 - Informed cost-sharing — Consumers will benefit from a more accurate understanding of out-of-pocket expenses, based on their providers and health plans. Currently, the Health and Human Services Department is considering alternative options for disclosing cost-sharing information.
 - Enhanced risk adjustment — Expanding the collection of data from the External Data Gathering Environment (EDGE) servers should contribute to improvements in overall transparency by strengthening the understanding of small group markets. Find out more about risk adjustment issues in 2020.

Learn more about transparency in coverage reporting in the 2020 letter to issuers in federally facilitated Exchanges.

Affordability
New parameters will change the previous limits of cost-sharing and affordability.

The out-of-pocket expenses would be as follows.

 - Individual coverage will be considered affordable at 8.39% of a household’s projected income, compared to 8.3% in 2019.
 - Limits for individual annual cost-sharing will increase to $8,200, compared to $7,900 this year. Family limits will change from $15,800 to $16,400.

The following table outlines the reductions in the maximum annual limitation on cost sharing for 2020.

Additionally, cost-sharing reduction adjustment factors will maintain stability to account for plan liability. The following chart outlines the cost-sharing adjustment reduction.

Prescription Drugs
Adjusted standards relating to Essential Health Benefits (EHB) now require non-grandfathered health plans to include EHB coverage. Future plans will be permitted to extend the number of prescription drugs available through the EHB-benchmark program. Additionally, cost-sharing for drugs must count toward annual limitations.

Plans that previously covered both name brand and generic prescriptions may be changed, according to state laws, to encourage consumers to purchase the more cost-effective generic version. Starting in 2020, brand drugs will not qualify as EHB, with exceptions, unless specified by a medical professional. Instead, plans will cover the generic, medically equivalent prescription.

General Hardship Exemption
Increased flexibility will be available to individuals seeking general hardship exemption. Currently, there are exemptions for a variety of hardships, but they don’t include general hardship. Now, individuals can claim exemption through the IRS tax filing process without an exemption certificate number from the Exchange. The proposed change would create additional flexible options for those seeking an exemption.

Medicare Enrollment Changes
First-dollar coverage plans for Medicare will be discontinued in 2020. First-dollar plans are those that cover all out-of-pocket expenses and include Plan C, Plan F, and High-Deductible Plan F. Those who were eligible before 2020 can still purchase Medigap plans that cover the Part B deductible of $185. These changes will only affect individuals who qualify for Medicare after 2020. The following alternatives will be available.

 - Plan N — Is the best alternative to Plan C for enrollees who want to keep their premiums low and can afford a small copay.
 - Plan G — Is a suitable substitute for Plan F and covers almost all medical expenses and excess charges. This plan offers the most comprehensive coverage and has lower premiums than Plan F.
 - High-deductible Plan F — Currently, there are no alternatives for the high-deductible Plan F, but a high-deductible Plan G could be released before 2020.
 
The decision to cut first-dollar plans from Medicare is an effort to prevent the overuse of health care services. However, critics are concerned the measure could hinder individuals from receiving treatment early enough to prevent more severe conditions.

Special Enrollment Periods
Previously, off-Exchange policyholders who experienced a mid-year decrease in income weren’t eligible for special enrollment periods. The result will promote continuous coverage. State Exchanges will be authorized to offer special enrollment periods to off-Exchange individuals who meet the following criteria.

 - Newly qualify for Advanced Premium Tax Credit (APTC).
 - Were enrolled in MEC and are entitled to receive benefits.
 - Provide evidence of decreased income. Find out how to prove loss of income.

States Exchanges will be permitted to determine the terms of eligibility verification and if there is sufficient need for special enrollment periods in their markets.

Where to Enroll
In addition to HealthCare.gov, enrollees can now sign up for Exchange coverage through enhanced direct enrollment (EDE). Below is a list of approved entities.

Presently, only HealthSherpa and Stride Health offer online EDE platforms through web-brokers. HealthSherpa was one of the first approved EDE partners in December 2018. Since March 2019, nine other entities were added to the list.

2020 Open Enrollment Dates and Deadlines
Below are dates and deadlines for open enrollment in 2020.

 - October 26^th, 2019 — Release of plans and benefits information
 - November 1^st, 2019 — Start of open enrollment
 - December 15^th, 2019 — End of open enrollment
 - January 1^st, 2020 — Coverage begins

Note some states have specific deadlines for open enrollment. Other states may offer extensions such as Washington DC, Rhode Island, New York, Minnesota, Massachusetts, Maryland, Florida, Connecticut, Colorado, and California. Although some states offer extensions, it’s best to shop for coverage options as early as possible.

Final Thoughts
A full report by the Health and Human Services Department outlining the proposed changes for benefit and payment parameters in 2020 is available at the Federal Register. The provisions should strengthen the integrity of Federally-Facilitated Exchanges (FFEs) as well as State-Based Exchanges on the Federal Platform (SBE-Fps).

Enrollees will benefit from a more predictable regulatory environment, lower prescription drug costs, and greater transparency. Although out-of-pocket expenses may increase short-term, individuals will have access to more enrollment options, hardship flexibility, and special enrollment options. Fee rate reductions and improved risk adjustment calculations should help prevent significant premium increases in the future.