09/13/2016

CMS Proposes New Rules To Address ACA Failures

CMS has proposed rule changes in light of recent withdrawals and heavy financial losses from major insurance providers participating in the Affordable Care Act (ACA) state health exchanges.  

Aetna has announced it will withdraw from all but four states in which it offers exchange plans. UnitedHealth Group has announced a major scale back in their ACA plans.  In New York, Health Republic was ordered to cease operations due to insolvency and recently state exchange insurance provider Oscar announced it was cutting its network in half. Northwell Health's CareConnect lost $53.2 million for the first half of the year, and is questioning its long-term participation in New York's individual and small-group exchanges.

Additionally in New York, EmblemHealth's two insurers, HIP and GHI, reported a combined net loss of $50.5 million through the first half of the year. The two insurers had a combined net loss of $113 million in 2015 and $485.8 million in 2014.
On June 30, ratings agency A.M. Best downgraded the company's credit rating.

Options to stabilize the program offered by CMS include establishing government-run plans and requiring insurers to offer exchange products as a condition for participating in Medicare Advantage or Medicaid managed care.

In addition, CMS is eyeing ways to increase enrollment of younger and healthier enrollees, to increase premium subsidies to make coverage more affordable, and better protect insurers against the risk of high-cost enrollees.

With the November elections approaching, ACA supporters feel a growing sense of urgency to make the exchange markets more financially viable for insurers and affordable for consumers, who are alarmed by premium hikes and about health plans exiting the exchanges.