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Making life harder for ObamaCare freeloaders

May 14, 2017

While Congressional Republicans continue to hash out their plan to repeal and replace Obamacare, the executive branch has already taken action to undo some of the law’s most destructive features.

Last month, the Centers for Medicare & Medicaid Services (CMS) cut the enrollment period for 2018 Obamacare exchange plans from 90 days to 45. This is one of several new rules that CMS enacted to address one of Obamacare’s central flaws: the fact that the law makes it far too easy for individuals to game the healthcare system.

Take the special enrollment periods authorized under Obamacare. These enrollment windows allow individuals to purchase an insurance plan outside of the open enrollment period if they experience certain qualifying life events, such as having a baby or losing their healthcare coverage.

This may sound nice on paper, but it has left the exchanges vulnerable to abuse. In particular, these special-enrollment periods open the door for patients to sign up for a plan only when they require medical care and to drop coverage soon afterward when their claim has been paid.

Sure enough, a report by the healthcare consulting firm Avalere Health found that special-enrollment period enrollees on average kept their health care coverage for less than half the time that open-enrollment customers did. Special-enrollment period enrollees also required more medical services like emergency room visits, the same study found.

The new CMS rules would make it far harder for patients to game the system in this way, by forcing patients to provide additional identification information before signing up for a plan during the special-enrollment period.

The Trump administration is also cracking down on exchange customers who stop paying their premiums. A national survey conducted by McKinsey & Company found that nearly half of exchange enrollees who stopped payments to their insurance plans in 2015 purchased the exact same plan in 2016.

This is simply unfair and adds to the cost of our expensive healthcare system. The new CMS rules allow insurers to demand any overdue premiums before allowing patients to sign up for the same plan the next year.


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