Insurance agents should be prepared for key changes in a shifting ACA landscape.
The Centers for Medicare and Medicaid Services (CMS) recently released its blueprint for a revised Affordable Care Act (ACA) marketplace in 2019. Among the most significant changes for next year is the elimination of the individual mandate, which requires all Americans to carry health insurance. Without that provision, taxpayers will not face a penalty for failing to buy a policy.
In addition to the repeal of the individual mandate, the CMS detailed a list of guidelines that will influence the ACA marketplace in 2019. Several of the amendments could have a particularly significant effect on agents whose clients purchase health insurance on the ACA exchanges.
New Certification Standards for Agents
Rather than have an entity approved by the Department of Health and Human Services (HHS) authorize agents and brokers to directly sell HealthCare.gov plans to consumers, the CMS will permit what it terms a “competent third party” to certify agents for that service. The CMS also revised the guidelines for enrollment in the Small Business Health Options Program (SHOP) so that small businesses can skip the online enrollment process and work with exchange-registered agents, brokers, or issuers instead. According to the CMS, this process “will help small business more easily enroll in coverage and lower costs.”
Under the new rules, states will be required to have just one Navigator (or a kind of liaison for the exchange’s users) that provides enrollment and support services instead of the current two. States can also opt for a for-profit or nonprofit entity as its Navigator, which won’t be required to have a physical presence in the state.
States to Assume More Regulatory Authority
Under the CMS revised standards, states will be given more oversight in setting the Essential Health Benefits (EHB) included in what the agency terms an EHB-benchmark plan. The ACA requires health policies now sold on the exchanges to contain ten basic health services, including maternity care, emergency room visits, and rehabilitative assistance. The power to define these basic services will shift to the states in 2019.
In place of those specific EHB codes, states can choose from broad categories, such as drug coverage and hospitalization, and outline certain standards within those categories. In other words, states will have the ability to set a minimum number of doctor visits or what prescriptions will be covered. For agents, this change means that they must carefully review a state’s EHB components to understand whether an exchange plan meets a client’s medical needs.
Similarly, the states will determine whether a health plan meets Qualified Health Plan (QHP) standards. Specifically, states will review the adequacy of a provider’s network.
Without the individual mandate in place, several studies indicate that ACA policy premiums will rise next year. A report by Covered California estimates that the increase could range between 8% to 13% from state to state. The Congressional Budget Office (CBO) puts the rise at 10% as younger, healthier people leave the exchange marketplace.
To help individuals find more affordable coverage, the administration has proposed lengthening the duration of short-term health plans from three months to a year. A Kaiser Family Foundation study found that short-term policy premiums cost 20% less than the cheapest ACA bronze plan. The same study points out, however, short-term policies cover fewer services than ACA-compliant plans.
As a result, agents must determine if such coverage is suitable for a client based on their health history. In some cases, the client may receive better coverage under an ACA plan as long as the cost isn’t prohibitive
Despite efforts to repeal the ACA, the system will remain in place in 2019. Its framework will be quite different, however, and agents should be aware of the upcoming changes so that they can recommend the best, most affordable health insurance options for their clients who buy ACA plans.