Ahead of the next open enrollment period, federal regulators are trying to clarify rules for member non-payment and grace periods, but insurers and providers may still have lingering concerns about getting paid.
With some 8 million Americans in current exchange plans set to re-enroll this year, and as millions more come into the market, non-payment is a problem that may bring some new administrative complexities and possibly some scenarios where individuals could game the system.
One of a number of questions insurers selling exchange plans through the federal marketplace may have after reading the Centers for Medicare & Medicaid Services' latest enrollment bulletin is how many unpaid premiums will be able to be recovered under the three-month grace period system.
Insurers selling qualified health plans in the federal exchange must provide a three-consecutive-month grace period for enrollees with tax credit subsidies who've paid for at least the first month. When those three months are over, and if the member hasn't paid all back-due premiums, insurers can terminate coverage retroactive to the last day of the first month of the period (July 31 if a member hasn't paid for July, August and September).
For consumers failing or struggling to pay their premiums over one, two or three months towards the end of the calendar year, CMS regulators wrote that the "QHP issuer must accept the enrollment, because the enrollee is still in a grace period."
This raises some complex scenarios, though, depending on whether the members in a grace period were auto-renewed or actively selected the same plan or a plan offered by the same insurer.
For example, CMS said an enrollee who "has been paying premiums in full throughout 2014, but fails to pay the December premium by the 12/1/14 due date, and enters a three-consecutive-month grace period that would end on the last day of February 2015." The enrollee would be auto-renewed, but if they do not pay all outstanding premiums by the end of February, they could be retroactively terminated to the end of December and could not enroll in another marketplace plan until the next open enrollment period unless they qualify for special circumstances.
In the event of natural disasters, domestic abuse and other circumstances, individuals qualify for a special enrollment, in which insurers "would not be able to attribute any payment from the individual toward the outstanding debt from the prior, terminated enrollment and then refuse to enroll the applicant based on failure to pay premiums," regulators wrote.
In another example, the terms of ending coverage could be different depending on the time of year the grace period occurs in:
An enrollee who is receiving (tax credits) is enrolled in QHP B, has been paying premiums in full since January, and fails to pay the August premium, due 8/1. The enrollee therefore enters the three month grace period on 8/1, which would expire 10/31. The enrollee makes no further premium payment and his/her enrollment is terminated by the QHP with an effective date of 8/31 (end of the first month of the grace period). Because the individual is not enrolled during December 2014, an 834 transaction will not automatically be sent to renew him/her in coverage for the 2015 benefit year. However, during Annual Open Enrollment, the individual logs into HealthCare.gov and updates his/her application for the upcoming benefit year, and is determined eligible for coverage and for APTC. The qualified individual again elects QHP B for coverage starting 1/1 and pays the first month's premium by the due date. The QHP is not permitted to apply the January premium payment to the non-payment that led to the August termination. The QHP must accept the enrollment.
These regulations and scenarios will only apply to subsidized plans in the federal marketplace; many states have shorter grace periods. But some states also have regulations similar to the federal government's standards and the federal government is poised to become the exchange market operator in most states, just as the nationwide public exchange market swells to upwards of 20 million over the next decade.
And while federal exchange plans are required to offer a three-month grace period for members, they can deny or pend claims after 30 days. That has worried some providers to such an extent that some are considering adopting third-party payment schemes for certain patients.
As Healthcare Payer News reported earlier, the American Hospital Association and Catholic Hospital Association have gotten a tentative okay from the federal government on the question of whether hospital nonprofit foundations can help patients pay for health insurance.
Some hospitals that are posed to continue seeing uninsured patients, in states where Medicaid eligibility isn't being expanded, are ready to use the third-party payment option.
"We've discussed this in length and talked with our attorneys and it does appear that we could do that if we so choose," said Pat Riley, insurance operations director at Forrest General Hospital in Hattiesburg, Miss. "And we're still considering that."