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Obamacare 'special' enrollees will have to prove eligibility

The Healthcare.gov website rolled out more improvements to make the user experience better.
Adam Jeffery | CNBC
The Healthcare.gov website rolled out more improvements to make the user experience better.

No documents, no Obamacare for you!

The Obama administration, responding to continued complaints by health insurers that some Obamacare customers are gaming the sign-up system, on Wednesday said it will require most people who enroll in Obamacare plans on HealthCare.gov outside of open enrollment season to provide documentation as evidence of their eligibility for so-called special enrollment periods.

The tougher rules requiring documentation will apply to people in the 38 states served by HealthCare.gov who try to sign-up outside of open enrollment after losing health insurance coverage from their job or elsewhere, moving, having or adopting a child, and getting married

About three-quarters of all people who enrolled via special enrollment on HealthCare.gov in the latter half of 2015 cited such a qualification when signing up. HealthCare.gov is the federally run Obamacare marketplace.

HealthCare.gov CEO Kevin Counihan called the new rules a "major overhaul of the special enrollment process," which "will enhance program integrity and contribute to a stable rate environment."

The new rules are a reaction to insurers' claims that many uninsured people who were not signing up for health coverage during the open enrollment period were using special enrollment periods to enroll in health plans once they got sick or otherwise needed medical treatments, only to drop that coverage once they received treatment that their plan paid for.

Insurers said that practice was hurting the profitability of their Obamacare plans because people who used the special enrollment periods in that manner were costing more in benefits paid out than what the customers paid in in premiums.

America's Health Insurance Plans, an industry trade group, responded to the announcement of rules by saying, "This new documentation process is a much-needed step in the right direction."

"While we are still reviewing the operational details, including the timing associated with verification, this latest effort will ensure qualified enrollees have access to coverage during important life transitions while also cutting down on the abuse and misuse of special enrollment periods which lead to higher costs for consumers," said Clare Krusing, AHIP's spokeswoman.

Under the Affordable Care Act, most Americans are required to have some form of health insurance or pay a tax penalty. The Obamacare exchanges were established to sell health plans, often subsidized with federal tax credits, to individuals who needed to buy coverage outside of employer-based insurance and government-run health programs such as Medicare and Medicaid.

The Obamacare exchanges have a limited open enrollment season in which to buy coverage for the coming year. The most recent open enrollment period ended Jan. 31.

People who don't sign up during open enrollment are typically barred from enrolling in coverage until the next open enrollment, which for 2017 coverage will begin next fall. But the special enrollment periods are open to people who have certain so-called life-qualifying events.

Here's more from the Centers for Medicare and Medicaid Services on the new rules.