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Feds plan to screen Obamacare customers for special enrollment periods

A couple enrolls in Obamacare with an insurance agent in Atlanta.
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A couple enrolls in Obamacare with an insurance agent in Atlanta.

Scamming the Obamacare system could soon get even harder.

Federal health regulators on Tuesday said they plan to screen at least some people who apply for Obamacare health insurance coverage on HealthCare.gov during so-called special enrollment periods in 2017 to verify their eligibility first.

At the same time, those regulators revealed that a new confirmation process implemented earlier this year — which required people to provide documentation to confirm their eligibility for special enrollments — has led to a nearly 15 percent drop in the number of such sign-ups compared to the same period last year.

Special enrollment periods are supposed to be open to people who experience a so-called qualifying life event, such as divorce, job loss, birth of a child or relocation, or other limited circumstances. In the past, they also have been open for people who only during tax season learned they faced a tax penalty for failing to have some form of health coverage.

Special enrollments occur outside of open enrollment, which for 2017 plans will run from Nov. 1 until Jan. 31, 2017. Most people are barred from obtaining individual health plan coverage outside of open enrollment.

The planned pilot program, dubbed a "pre-enrollment verification process," would apply to customers of HealthCare.gov, the federal Obamacare marketplace that sells individual health plans to residents of 38 states.

The verification process would require them to be prospectively approved for special enrollment based on information they submit.

The program is just the latest effort by the federal government to clamp down on abuse of special enrollment periods,

"We are committed to making sure that special enrollment periods are available to those who are eligible for them, and equally committed to avoiding any misuse or abuse of special enrollment periods," the Centers for Medicare and Medicaid Services said in a "frequently asked questions" sheet Tuesday.

Insurers have complained that some Obamacare customers are bouncing in and out of insurance coverage during the year. Those people, insurers say, avoid enrolling in a health plan until they find themselves needing medical services. They then sign up, obtain the needed health care with their plan picking up most of the cost of it, and then drop the coverage afterward.

The practice, insurers have contended, has hurt their plans' financial performance, because they are not getting enough premiums from customers to cover their health-care costs.

Earlier this year, warnings were added to HealthCare.gov about the inappropriate use of special enrollment. Regulators also eliminated certain special enrollment periods and tightened eligibility standards for others, and introduced the confirmation process.

CMS, which oversees Obamacare, said Tuesday that the scope of the pilot program for pre-enrollment verification "is still being determined."

In the meantime, the agency wants stakeholders, including insurers, to give their input on whether the pilot screening program should be geographically targeted, or involve samples of HealthCare.gov customers.

It also wants to know if the pilot should "focus on a subset of special enrollment periods that are most prone to abuse."

And CMS also asked, "How should we conduct the pilot in a manner that minimizes burdens on consumers and disruptions in coverage?" and "How should we measure the impact of the pilot on compliance, enrollment, continuity of coverage, and the health of the risk pool, and do so in a timely way as to inform potential policy changes for 2018?"