Obamacare's big deadline — and a number of other rules affecting customers — could get a lot tighter next season.
The Trump administration on Wednesday proposed dramatically shortening the amount of time that people would have to sign up for individual health insurance plans during open enrollment for 2018. Open enrollment would run from Nov. 1 through Dec. 15, 1½ months less the open enrollment season for 2017 plans.
At the same time, the administration called for toughening rules about signing up outside of open enrollment and about customers resuming coverage after failing to pay premiums, and loosening rules about the design of individual plans.
The administration's new proposed Obamacare rule is designed to alleviate financial worries that insurers have about staying in that market next year while the Trump administration moves toward repealing and replacing the Affordable Care Act. Initial reaction to the proposal by the insurance community was positive.
There is growing concern that uncertainty about the timing of that repeal-and-replace effort could lead some insurers to exit the Obamacare business.
While the vast majority of Americans get health insurance through a job or through government-run Medicare and Medicaid programs, millions of people are covered by individual Obamacare health plans sold on or off of government-operated marketplaces.
Announcement of the proposed rule comes a day after major insurer Humana said that in 2018 it will exit the 11 remaining states where the company still sells Obamacare plans — and on the same day that Aetna's CEO told The Wall Street Journal the company did not have enough information about whether it would likewise exit Obamacare plans altogether.
A number of other insurers continue to lose money on their Obamacare plans business. And all insurers have just several months left before they have to propose their individual plan rates for next year, leaving them little time to determine whether to stay in the market, or leave.
The proposed rule revealed Wednesday aims to improve the so-called risk pool of insurers, which is the mix of healthy and less-healthy customers whose premium payments are, ideally, supposed to exceed the amount of health benefits they claim from a plan.
"We believe these changes are critical to improving the risk pool, and would together promote a more competitive market with increased choice for consumers," the federal Centers for Medicare and Medicaid Services said in the proposed rule, the first formal regulatory change the new Trump administration has proposed for Obamacare.
Public comment on the rule is open until March 7.
The Trump administration said that moving back the the open enrollment deadline for 2018 plans from Jan. 31, 2018, to Dec. 15, 2017, would discourage people from waiting until late December or January to see if they have health needs before signing up for insurance. The administration noted that a Nov. 1 to Dec. 15 deadline was already set to be in effect for 2019 open enrollment season and thereafter.
People who miss the open enrollment window are not able to sign up for individual plans unless they qualify for a special enrollment period. Those periods are open to people with certain kinds of life events — marriage, birth of a child and loss of a job.
The new proposed rule calls for pre-screening people who want to sign up during a special enrollment by requiring documentation that verifies their eligibility for enrollment. Currently, only 50 percent of the people who apply for special enrollment on HealthCare.gov, the federal Obamacare market that serves 39 states, are pre-screened to that extent.
That part of the rule is designed to deter people from waiting to sign up for insurance until they get sick or otherwise need health services. Insurers have said they are losing money on Obamacare plans partly as a result of such customers.
The rule also calls for demanding that customers who stop paying their monthly premiums to a particular insurer pay off their debt to that insurer before resuming coverage from the same company.
The Trump administration also wants to let states, rather than federal health regulators, determine whether the size of a health plan's network of providers — doctors, hospitals and other entities — is sufficiently large enough for their customers.
The rule also would give insurers more leeway in designing their plans as it relates to the so-called actuarial value of those plans. Actuarial value is a measurement of how much of a customer's health benefits are paid by the plan, and how much is paid out of pocket by the customers.
The proposal is designed to "put downward pressure" on the monthly premiums that insurers charge, but at the same time could lead to some customers actually paying more out of pocket for health services than they otherwise would.
And the rule would give insurers more time to set rates for plans that take effect in 2018, in light of the new proposals.
"Americans participating in the individual health insurance markets deserve as many health insurance options as possible," said Dr. Patrick Conway, acting administrator of CMS, after the proposed rule was unveiled Wednesday.
"This proposal will take steps to stabilize the [Obamacare] marketplace, provide more flexibility to states and insurers, and give patients access to more coverage options. They will help protect Americans enrolled in the individual and small group health insurance markets while future reforms are being debated."
Insurance industry groups and congressional Republicans applauded the proposed rule changes, while a leading Obamacare supporter criticized it.
Marilyn Tavenner, president and CEO of the industry group America's Health Insurance Plans, said, "We commend the administration for proposing these regulatory actions as Congress considers other critical actions necessary to help stabilize and improve the individual market for 2018.
"Our commitment is to ensure short-term stability and long-term improvements. While we are reviewing the details, we support solutions that address key challenges in the individual market, promote affordability for consumers, and give states and the private sector additional flexibility to meet the needs of consumers," Tavenner said.
Ceci Connolly, president and CEO of the Alliance of Community Health Plans, called the proposal "a promising first step," and said the group is "very pleased that the administration is heeding the call" of consumers, insurers, providers and others to stabilize the Obamacare market during any potential transition from the Affordable Care Act.
But Connolly also said that the proposal "does not address all of the uncertainty for plans and patients alike."
Aetna Chairman and CEO Mark Bertolini said the proposals represented "some good initial steps" by the Trump administration.
"After numerous discussions with the administration and congressional leaders, I am optimistic that they are totally committed to an Affordable Care Act replacement package that will better meet consumer expectations, Bertolini said.
House Energy and Commerce Committee Chairman Greg Walden, R-Ore., and Health Subcommittee Chairman Michael Burgess, R-Texas, in a joint statement said: "From requiring documentation for special enrollment periods and closing a loophole, these changes help protect taxpayers and stabilize markets. Working together, we will continue to get results for people across the country."
But Andy Slavitt, who until last month oversaw Obamacare for the Obama administration, criticized both the new proposed rule and the Trump administration's ongoing plan to repeal Obamacare.
"The administration has created a manufactured crisis with talk of repeal but no plan to replace, nonenforcement of the rules and reducing outreach around HealthCare.gov so fewer people would sign up for coverage, " said Slavitt, who had been acting administrator for CMS.
"If the administration is serious about strengthening the [Obamacare] marketplace, they will reduce uncertainty and focus on keeping the marketplace stable and growing — not focus on changes that will raise deductibles, reduce access to physicians and put limitations on the ability for people to get coverage," Slavitt said.
Caroline Pearson, senior vice president at the consultancy Avalere Health, said, "Today's proposed rule is an effort to stabilize the exchange markets until an ACA replacement plan is approved and implemented.
"Many health plans have expressed uncertainty about their plans for 2018 exchange markets, and this rule is meant to encourage plan participation," Pearson noted. "It is unclear, however, whether these changes will be sufficient to ensure all regions of the country have an exchange operating in 2018."