Market Stabilization PDF

Patient Protection and Affordable Care Act;
Market Stabilization
ACTION: Proposed rule.

Final rule issued   insure me

I. Executive Summary

Affordable Insurance Exchanges, or “Exchanges” [] (in this proposed rule, we also call an Exchange a Health Insurance MarketplaceSM,1 or MarketplaceSM) are competitive marketplaces through which qualified individuals and qualified employers can purchase health insurance coverage. Many individuals who enroll in qualified health plans (QHPs) through individual market Exchanges are eligible to receive a premium tax credit [get complementary quote] to make health insurance premiums more affordable, and receive reductions in cost-sharing payments to reduce out-of-pocket expenses for health care services.

The health and competitiveness of the Exchanges, as well as the individual and small group markets in general, have recently been threatened by issuer exit and increasing rates in many geographic areas. Some issuers have had difficulty attracting and retaining the healthy consumers necessary to provide for a stable risk pool that will support stable rates. In particular, some issuers have cited special enrollment periods as a potential source of adverse selection that has contributed to this problem. Concerns over the risk pool have led some issuers to cease offering coverage on the Exchanges in particular states and counties, and other issuers have increased their rates.

A stabilized individual and small group insurance market will depend on greater choice to draw consumers to the market and vibrant competition to ensure consumers have access to competitively priced, affordable coverage. Higher rates, particularly for consumers who are not receiving advance payments of the premium tax credit (APTC), [get complementary quote] resulting from minimal choice and competition can cause healthier individuals to drop out of the market, further damaging the risk pool, and risking additional issuer attrition from the market. This proposed rule would take steps to provide needed flexibility to issuers to help attract healthy consumers to enroll in health insurance coverage, improving the risk pool and bringing stability and certainty to the individual and small group markets.

To improve the risk pool and promote stability in the individual insurance market, we propose taking several steps to increase the incentives for individuals to maintain enrollment in health coverage and decrease the incentives for individuals to enroll only after they discover they require services.

First, we propose changing the dates for open enrollment in the individual market for the benefit year starting January 1, 2018, from a range of November 1, 2017, to January 31, 2018 (the previously established open enrollment period for 2018), to a range of November 1, to December 15. This change would require individuals to enroll in coverage prior to the beginning of the year, unless eligible for a special enrollment period, and is consistent with the open enrollment period established for the open enrollment periods for 2019 and beyond. We anticipate this change could improve the risk pool because it would reduce opportunities for adverse selection by those who learn they will need services in late December and January; and will encourage healthier individuals who might have previously enrolled in partial year coverage after December 15th to instead enroll in coverage for the full year.

Second, in response to concerns from issuers about potential abuse of special enrollment periods in the individual market Exchanges resulting in individuals enrolling in coverage only after they realize they will need services, we propose increasing pre-enrollment verification of eligibility for all categories of individual market special enrollment periods for all States served by the platform from 50 to 100 percent of new consumers who seek to enroll in Exchange coverage. We also propose making several additional changes to our regulations regarding special enrollment periods that we believe could improve the risk pool, improve market stability, and promote continuous coverage.

Third, we propose revising our interpretation of the guaranteed availability requirement to allow issuers to apply a premium payment to an individual’s past debt owed for coverage from the same issuer enrolled in within the prior 12 months. We believe this proposal would have a positive impact on the risk pool by removing economic incentives individuals may have had to pay premiums only when they were in need of health care services. We also believe this proposal is important as a means of encouraging individuals to maintain continuous coverage throughout the year and prevent gaming.

Fourth, we propose to increase the de minimis variation in the actuarial values (AVs) used to determine metal levels of coverage for the 2018 plan year. This proposed change is intended to allow issuers greater flexibility in designing new plans and to provide additional options for issuers to keep cost sharing the same from year to year. We are not proposing a modification for the de minimis range for the silver plan variations.

We believe these changes are critical to improving the risk pool, and would together promote a more competitive market with increased choice for consumers.

The proposed amendments in this rule are also intended to affirm the traditional role of States in overseeing their health insurance markets

***Seems to go against the proposal to sell across state lines.

while reducing the regulatory burden of participating in Exchanges for issuers.

The first of these proposals relates to network adequacy review for QHPs. The modified approach would not only lessen the regulatory burden on issuers, but also would recognize the primary role of States in regulating this area.

The second change would allow issuers to use a write-in process to identify essential community providers (ECPs) who are not on the HHS list of available ECPs for the 2018 plan year; and lower the ECP standard to 20 percent (rather than 30 percent), which we believe would make it easier for a QHP issuer to build networks that comply with the ECP standard.

Robust issuer participation in the individual and small group markets is critical for ensuring consumers have access to affordable coverage, and have real choice in coverage. Continued uncertainty around the future of the markets and concerns regarding the risk pools are two of the primary reasons issuer participation in some areas around the country has been limited. The proposed changes in this rule are intended to promote issuer participation in these markets and to address concerns raised by issuers, States, and consumers. We believe such changes would result in broader choices and more affordable coverage.

CMS-9929-P  View original pdf 

Send your comments to the Feds

The proposed market stabilization rule, issued in February, contained provisions that would shorten the open-enrollment period for the federal marketplace from three months to six weeks; shift authority to states to determine whether health plans have adequate provider networks; and let insurers design plans that pay for a somewhat lower percentage of consumers’ medical costs. It does not apply to state-run exchanges in states such as California and New York.

Learn More ==> Modern Health 4.3.2017 

Market Stabilization PDF
Market Stabilization PDF


CMS Proposes New Rule To Stabilize ACA Market
Special Enrollment Rules - Western Poverty Center
Special Enrollment Rules – Western Poverty Center

III. Provisions of the Proposed Rule

A. Part 147 – Health Insurance Reform Requirements for the Group and Individual Health Insurance Markets

1. Guaranteed availability of coverage (§147.104)

The guaranteed availability provisions at section 2702 of the PHS Act and §147.104 require health insurance issuers offering non-grandfathered coverage in the individual or group market to offer coverage to and accept every individual and employer in the State that applies for such coverage unless an exception applies. Individuals and employers typically are required to pay the first month’s premium to have coverage effectuated.

We have previously interpreted the guaranteed availability requirement to mean that an issuer may not apply any premium payment made for coverage in a different product to any outstanding debt owed from any previous coverage and then refuse to effectuate the enrollment based on failure to pay premiums.  Under that interpretation, any coverage under a different product would fall under the guaranteed availability requirements and the consumer must be allowed to purchase coverage without having to pay past due premiums.

***Insure Me Blog opposing this rule.

However, under our previous interpretation, should the individual seek to renew prior coverage with the same issuer in the same product, the issuer could attribute the enrollee’s forthcoming premium payments to prior non-payments.

HHS has received comments from stakeholders expressing concerns about the potential for individuals with histories of non-payment to take advantage of guaranteed availability by declining to make premium payments for coverage at the end of a benefit year, for example.  In the preamble to the 2014 Market Rules, HHS encouraged States to consider approaches to discourage gaming and adverse selection while upholding consumers’ guaranteed availability rights and indicated that we intended to address this issue in future guidance.

To address the concern about potential gaming, we propose to modify our interpretation of the guaranteed availability rules with respect to non-payment of premiums. Under this proposal, an issuer would not be considered to violate the guaranteed availability requirements if the issuer attributes a premium payment for coverage under the same or a different product to the outstanding debt associated with non-payment of premiums for coverage from the same issuer enrolled in within the prior 12 months and refuses to effectuate new coverage for failure to pay premiums. Assuming State law does not prohibit such action, this would permit an issuer to require a policyholder whose coverage is terminated for non-payment of premium in the individual or group market to pay all past due premium owed to that issuer after the applicable due date for coverage enrolled in the prior 12 months in order to resume coverage from that issuer. The issuer would be required to apply its premium payment policy uniformly to all employers or individuals regardless of health status, and consistent with applicable nondiscrimination requirements.3 This proposal would not prevent the individual or employer from enrolling in coverage with a different issuer, or affect the ability of any individual other than the person contractually responsible for the payment of premium to purchase coverage, whether from the same or different issuer. We encourage States to adopt a similar approach, with respect to any State laws that might otherwise prohibit this practice.

Because of rules regarding grace periods and termination of coverage, individuals with past due premium would generally owe no more than 3 months of premiums. Furthermore, for individuals on whose behalf the issuer received APTC, their past premium owed would be net of any APTC paid on their behalf to the issuer.
We note that due to operational constraints, the Federally-facilitated Small Business Health Options Program will be unable to offer issuers this flexibility at this time.

We seek comment on this proposal, including whether issuers that choose to adopt this type of premium payment policy should be permitted to implement it with a premium payment threshold policy, under which the issuer can consider an individual to have paid all amounts due, if the individual pays an amount sufficient to maintain a percentage of total premium paid out of the total premium owed equal to or greater than a level prescribed by the issuer. We also seek comment on whether issuers should be required to provide notice to individuals regarding whether they have adopted a premium payment policy permitted under this proposal.

In addition, we propose to amend paragraph (b)(2)(i) to conform with proposed changes to special enrollment periods discussed in greater detail in section III.B.2. of this proposed rule. Because the proposed changes to §155.420(a)(4) through (5) are being proposed for special enrollment periods in the individual market, both inside and outside of an Exchange, we propose to amend §147.104(b)(2)(i) to specify that these paragraphs apply to special enrollment periods throughout the individual market. We seek comment on how these changes would be operationalized outside of the Exchanges.

B. Part 155 – Exchange Establishment Standards and Other Related Standards under the Affordable Care Act

1. Initial and annual open enrollment periods (§155.410)

2. Special enrollment periods (§155.420)

3. Continuous coverage

Because of the challenges in the individual market related to adverse selection, HHS believes it is especially important in this market to adopt policies that promote continuous enrollment in health coverage and to discourage individuals from waiting until illness occurs to enroll in coverage.

While the proposals in this rule relating to guaranteed availability, the annual open enrollment period, and special enrollment periods would encourage individuals to maintain coverage throughout the year, we are also actively exploring additional policies in the individual market that would promote continuous coverage and seek input on which policies would effectively do so consistent with existing legal authorities. For example, with respect to special enrollment periods that require evidence of prior coverage, we are considering policies for the individual market that would require that individuals show evidence of prior coverage for a longer “look back” period. For example, we could require prior coverage for 6 to 12 months, except that we might consider an individual to have had prior coverage, even if there was a small gap in coverage (for example, up to 60 days). Alternatively, for individuals who are not able to provide evidence of prior coverage during such a look back period, an exception could allow them to enroll in coverage if they otherwise qualify for a special enrollment period, but impose a waiting period of at least 90 days before effectuating enrollment, or assess a late enrollment penalty. These policies could provide a disincentive for individuals to drop out of coverage, thus promoting continuous coverage.

HHS is also interested in whether policies are needed for the individual market similar to those that existed under the Health Insurance Portability and Accountability Act of 1996 (Pub. L. 104-191) (HIPAA), which required maintenance of continuous, creditable coverage without a 63-day break in the group market if individuals wished to avoid the pre-existing condition exclusions, and allowed waiting periods to be imposed under certain circumstances. Although the HIPAA rules did not require that individuals maintain coverage, the rules were designed to provide an important incentive for individuals to enroll in coverage year-round, not just when in need of health care services; reduce adverse selection; and help prevent premiums from climbing to levels that would keep most healthy individuals from purchasing coverage.

With these policies, we likely would seek not only to encourage uninsured individuals to enroll in coverage during the open enrollment period, but also to encourage those with coverage to maintain continuous coverage throughout the year.

We note that we seek comment on additional policies that would promote continuous coverage, but are not, at this time, proposing any of the policies described in this section III.B.3. of this notice.

4. Enrollment periods under SHOP

Because the proposed changes to §155.420(a)(3) through (5) are being proposed for special enrollment periods in the individual market only, we propose to amend §155.725(j)(2)(i) to specify that these paragraphs do not apply to special enrollment periods under the Small Business Health Options Program (SHOP). A more detailed discussion of the proposed changes in §155.420(a) is provided in section III.B.2. of this proposed rule.

5. Exchange functions: Certification of qualified health plans (Part 155, Subpart K)

In light of the need for issuers to make modifications to their products and applications to accommodate the changes proposed in this rule, should they be finalized, we would issue separate guidance to update the QHP certification calendar and the rate review submission deadlines to give additional time for issuers to develop, and States to review, form and rate filings for the 2018 plan year that reflect these changes.

C. Part 156 – Health Insurance Issuer Standards under the Affordable Care Act, Including Standards Related to Exchanges

1. Levels of coverage (actuarial value) (§156.140)

2. Network adequacy (§156.230)

3. Essential community providers (§156.235)

IV. Collection of Information Requirements

B. ICRs regarding Network Adequacy Reviews and Essential Community Providers (§156.230, §156.235)

In this proposed rule, we are proposing that, for the 2018 plan year, HHS would defer to the State’s reviews in States with authority and means to assess issuer network adequacy; while in States without authority and means to conduct sufficient network adequacy reviews, HHS would rely on an issuer’s accreditation (commercial or Medicaid) from an HHS-recognized accrediting entity. This would reduce the burden related to the time and distance evaluation for issuers. Unaccredited issuers would be required to submit an access plan as part of the QHP Application. We are not aware of any unaccredited issuer that plans to enter the market in 2018, therefore we expect that none of the issuers will need to submit an access plan. We estimate that this would reduce the burden related to the review by 15 hours per issuer on average. The total annual reduction in burden for 450 QHP issuers and would be 6,750 hours with an equivalent reduction in cost of $519,750 (at an hourly cost of $77). For stand-alone dental issuers, the estimated reduction in burden would be 10 hours on average annually for each issuer. For 250 issuers, the total annual reduction in burden would be 2,500 hours with an equivalent reduction in cost of $192,500 (at an hourly rate of $77).
We expect to collect access plans from all stand-alone dental issuers in states without adequate review. We assume that approximately 125 stand-alone dental issuers would need to submit access plans, and each issuer would require approximately 1 hour to prepare and submit a plan. For all 125 issuers, the total annual burden would be 125 hours, with an annual equivalent cost of $9,625 (at an hourly rate of $77).
The proposed change in the ECP standard would reduce the burden for issuers that previously needed to submit a justification to prove that they include in their provider networks a sufficient number and geographic distribution of ECPs to meet the standard in §156.235. We estimate that in the absence of this change, approximately 20 QHP and stand-alone dental plan issuers would have each spent 45 minutes on average to prepare an submit a justification. The total reduction in burden for 20 issuers would be 15 hours with an equivalent reduction in cost of
$1,155 (at an hourly rate of $77).
We will revise the information collection currently approved under OMB control number 0938-1187 (Continuation of Data Collection to Support QHP Certification and other Financial
Management and Exchange Operations) to account for this reduction in burden.

TABLE 1: Annual Reporting, Recordkeeping and Disclosure Burden

V. Response to Comments

VI. Regulatory Impact Analysis

List of Subjects
45 CFR Parts 147
Health care, Health insurance, Reporting and recordkeeping requirements.
45 CFR Part 155
Administrative practice and procedure, Advertising, Brokers, Conflict of interest, Consumer protection, Grant administration, Grant programs-health, Health care, Health insurance, Health maintenance organizations (HMO), Health records, Hospitals, Indians,
Individuals with disabilities, Intergovernmental relations, Loan programs-health, Medicaid, Organization and functions (Government agencies), Public assistance programs, Reporting and recordkeeping requirements, Technical assistance, Women and youth.
45 CFR Part 156
Administrative practice and procedure, Advertising, American Indian/Alaska Natives,
Conflict of interest, Consumer protection, Cost-sharing reductions, Grant programs-health,
Grants administration, Health care, Health insurance, Health maintenance organization (HMO),
Health records, Hospitals, Individuals with disabilities, Loan programs-health, Medicaid, Organization and functions (Government agencies), Public assistance programs, Reporting and recordkeeping requirements, State and local governments, Sunshine Act, Technical assistance,
Women, Youth.

For the reasons set forth in the preamble, the Department of Health and Human Services proposes to amend 45 CFR parts 147, 155, and 156 as set forth below:


1. The authority citation for part 147 continues to read as follows:
Authority: Secs 2701 through 2763, 2791, and 2792 of the Public Health Service Act (42
USC 300gg through 300gg-63, 300gg-91, and 300gg-92), as amended.
2. Section 147.104 is amended by revising paragraph (b)(2)(i) introductory text to read as follows:
§147.104 Guaranteed availability of coverage.
* * * * *
(b) * * *
(2) * * *
(i) Subject to §155.420(a)(4) and (5) of this subchapter, a health insurance issuer in the individual market must provide a limited open enrollment period for the triggering events described in §155.420(d) of this subchapter, excluding the following:
* * * * *


3. The authority citation for part 155 continues to read as follows:
Authority: Title I of the Affordable Care Act, sections 1301, 1302, 1303, 1304, 1311,
1312, 1313, 1321, 1322, 1331, 1332, 1334, 1402, 1411, 1412, 1413, Pub. L. 111-148, 124 Stat. 119 (42 U.S.C. 18021-18024, 18031-18033, 18041-18042, 18051, 18054, 18071, and 1808118083).

* * * * *
5. Section 155.420 is amended by:
a. Adding paragraphs (a)(3) through (5);
b. Revising paragraphs (b)(5) and (d) introductory text;
c. Adding paragraph (d)(2)(i)(A) and reserved paragraph (d)(2)(i)(B); and
c. Removing and reserving paragraph (d)(7)(ii).
The additions and revisions read as follows:

§155.420 Special enrollment periods.

* * * * *

6. Section 155.725 is amended by revising paragraph (j)(2)(i) to read as follows:

§155.725 Enrollment periods under SHOP.
* * * * *
(j) * * *
(2) * * *
(i) Notwithstanding §155.420(a)(3) through (5) of this subchapter, experiences an event described in §155.420(d)(1) (other than paragraph (d)(1)(ii)), or experiences an event described in §155.420(d)(2), (4), (5), (7), (8), (9), (10), (11), or (12);
* * * * *
6. The authority citation for part 156 continues to read as follows:
Authority: Title I of the Affordable Care Act, sections 1301-1304, 1311-1313, 1321-
1322, 1324, 1334, 1342-1343, 1401-1402, Pub. L. 111-148, 124 Stat. 119 (42 U.S.C. 1802118024, 18031-18032, 18041-18042, 18044, 18054, 18061, 18063, 18071, 18082, 26 U.S.C. 36B, and 31 U.S.C. 9701).


[FR Doc. 2017-03027 Filed: 2/15/2017 4:15 pm; Publication Date: 2/17/2017] 1 Health Insurance MarketplaceSM and MarketplaceSM are service marks of the U.S. Department of Health & Human Services.
2 Initial Guidance to States on Exchanges (November 10, 2018). Available at
3 We remind issuers that they may also have obligations under other applicable Federal laws prohibiting discrimination, and issuers are responsible for ensuring compliance with all applicable laws and regulations. For example, issuers that receive Federal financial assistance are subject to Title VI of the Civil Rights Act of 1964, section 504 of the Rehabilitation Act of 1973, and section 1557 of the Affordable Care Act, and as a result, have separate responsibilities not to discriminate on the basis of race, color, national origin, sex, age, and disability, in providing access to their services. In addition, §156.200(e) requires QHP issuers to not discriminate on the basis of race, color, national origin, disability, age, sex, gender identity or sexual orientation. There may also be separate, independent non-discrimination obligations under State law.
4 Section 156.270(d) requires issuers to observe a 3 consecutive month grace period before terminating coverage for those enrollees who are eligible for and have elected to receive APTC and who upon failing to timely pay their premiums are receiving APTC. Section 155.430(d)(4) requires that when coverage is terminated following this grace period, the last day of enrollment in a QHP through the Exchange is the last day of the first month of the grace period. Therefore, individuals whose coverage is terminated at the conclusion of a grace period would owe at most 1 month of premiums. Individuals who attempt to enroll in new coverage while in a grace period (and whose

5 November 2016, Results of Enrollment Testing for the 2016 Special Enrollment Period, GAO-17-78, US Government Accountability Office.
6 February 25, 2016. Fact Sheet: Special Enrollment Confirmation Process. Available online at
7 Ibid.
8 December 14, 2016, Fact Sheet: Pre-Enrollment Verification for Special Enrollment Periods, available at
9 HHS, Clarifying, Eliminating and Enforcing Special Enrollment Periods (January 19, 2016), available at
10 Although we are expanding the de minimis range for bronze plans to -4 percentage points, we recognize that achieving an AV below 58 percent is difficult with the claims distribution underlying the current AV calculator.
11 Letter to Issuers on Federally-facilitated and State Partnership Exchanges (April 5, 2013). Available at
12 Recognition of Entities for the Accreditation of Qualified Health Plans 77 FR 70163 (November 23, 2012) and Approval of an Application by the Accreditation Association for Ambulatory Health Care (AAAHC) To Be a
Recognized Accrediting Entity for the Accreditation of Qualified Health Plans 78 FR 77470 (December 23, 2013).
13 List available at
14 “Table of Small Business Size Standards Matched to North American Industry Classification System Codes”, effective February 26, 2016, U.S. Small Business Administration, available at

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