CMS announces “major overhaul” of SEP, new eligibility confirmation process: https://t.co/e67IIbgdyh
cc: @charles_gaba @bjdickmayhew
— Adam Cancryn (@adamcancryn) February 24, 2016
Special Enrollment Periods occur outside of the annual Open Enrollment Period. A SEP is triggered when a Qualifying Event occurs. A QE is a big change in circumstances. The most common are the start and dissolution of marriages, the birth and death of dependents, loss of insurance and loss of income. Some insurers have been complaining that the people who buy during an SEP are not truly experiencing Qualifying Events and that this is blowing up their risk pool. Recent evidence in California supports this argument.
There is some gaming going on. The matched pair of the same individual getting rejected for a SEP off-Exchange and then being approved for a SEP on Exchange is clear proof.
Verification and validation requirements such as requiring submittal of marriage licenses or divorce decrees, or a bill with the new address will reduce some of this. Income changes can be validated by Covered California calling former employers and asking if Mr. Smith worked there between these dates and that his last salary was what was listed on the subsidy calculation.
Some SEPs will always be more expensive than normal enrollment. Babies are cute but they are expensive until they start walking. Validation requirements add a cost to acquisition so that will deter some healthy individuals who are eligible for validated SEPS to not go that route as the hassle is not worth it. The SEP pool should always be a bit sicker on average than the open enrollment pool.
CMS is now asking for verification of changes in circumstances
Beginning in the next several months, all consumers who enroll or change plans using an SEP for any of the following triggering events will be directed to provide documentation:
- Loss of minimum essential coverage,
- Permanent move,
- Adoption, placement for adoption, placement for foster care or child support or other court order, or
These SEPs represented three quarters of HealthCare.gov consumers who enrolled or changed plans using an SEP in the second half of 2015.
Verification of changes in life status will reduce gaming as shown by people who tried and failed to get a SEP off-exchange where insurers can request validating documents and then went on-Exchange where only an attestation was needed to activate a SEP.
This is moving the Exchanges to a state more similar to Employer Sponsored Coverage as I had to provide a birth certificate to add my then newborn son to my coverage.
How will they verify income changes for self-employed people or people working through temp agencies? Their incomes are always in flux. Or will they just trust people to report incomes at the end of the year because they can’t be arsed to change their insurance constantly?
@Luthe: Income changes are not being scrutinized with this change. And I don’t believe that that would trigger an SEP – income fluctuation can affect subsidy level, but I think they’re OK with just figuring that once a year.
Aww man, people buying insurance are trying to game the system? What will the poor insurance companies do!?
@Kylroy: Ah. I ask because my income bounces between “Medicaid” and “eligible for subsidy” so it’s a bit of concern to me around tax time.
@Luthe: Yeah, per the article, the SEPs they’re focusing on are:
Loss of minimum essential coverage,
Adoption, placement for adoption, placement for foster care or child support or other court order, or
None of those are frequent happenings for the vast majority of people.
@benw: Uh, stop offering individual coverage and revert us to the pre-ACA world? I worked in individual insurance back in the early-mid 00s, it was a mess that I have no desire to make anyone revisit.
I support anyone and everyone who games the system this way, because it will rightly kill this abortion of a health insurance system.
@KH: See comment #6. It will indeed kill it, and replace it with the same mess we had for the previous several decades.
Major Major Major Major
Richard, do you know if pending-but-unfiled divorce counts? We’re basically ‘together’ just until April 15 at this point.
well in the temp worker pool it was always a crap shoot…. since my contract was always up for evaluation every three months it was a big unknown if I would be extended or not. So you stay on the spouses insurance but naturally the spouses employer wanted me off of the policy if it all possible, never mind the hate and discontent for our family if I have to change medical providers multiple times a year while ever agency was trying to lowest common denominator who got what policy. So it’s no surprise to me that folks game the system, some of them prefer not to be placed thru flaming hoops every three months, surprised, I am not.
Major Major Major Major
@Kylroy: I think he was referring to the proverbial death-spiral-that-will-usher-in-rainbow-farting-unicorns theory. You know, like how the banking crisis led to a Marxist utopia.
@Major Major Major Major: I know, I just felt like pointing out the reality of the situation.
@Major Major Major Major:
I suspect that since it’s a government agency, CMS’ attitude will be “Paperwork or it didn’t happen.”
@Major Major Major Major: It wouldn’t. For SEPs all they care about is healthcare coverage, and you’re eligible to be on a spouse’s coverage until the divorce is final. (I carried my ex wife for over a year after we physically separated.)
@Luthe: “How will they verify income changes for self-employed people or people working through temp agencies?”
I had to submit 38 pages of paperwork, which included marked-up bank statements, for my family. Fortunately, the state exchange did agree that my family had become poorer and allowed us an SEP. I am not sure we could have gotten that concurrence from healthcare.gov, which might have left us unable to pay for coverage for half a year.
Mr. Mayhew, do you have any sense of how many of those SEPs are the result of drastic income changes, which are common in the post-2008 economy? And how ’bout some discussion of how the system works for people with variable incomes? I know that when one crosses the Medicaid/Exchange boundary one has to resubmit paperwork, and if one is unlucky enough to be over 55 and cross the 4xFPL boundary one gets hammered at the end of the year to the tune of some thousands, but I am not sure what happens at the 2.5xFPL boundary, and I wonder if there are more boundaries.
The socialist Corey Robin once commented “In the neoliberal utopia, all of us are forced to spend an inordinate amount of time keeping track of each and every facet of our economic lives.…in real (or at least our preferred) life, we do have other, better things to do.”—link
For extra credit, who pays the medical bills if you get bitten rescuing someone else’s cat?
@Luthe: Bank statements would work when you apply for Medicaid and when Medicaid says you make too much, that triggers a loss of coverage and a letter from your state Medicaid office to qualify for a SEP
@Major Major Major Major: Legally you are still together. As soon as the judge signs away, you’re not and then you get a SEP
@Kylroy: so yes, that’s the threat, isn’t it? Desperate people, stop your shenanigans or the insurance companies will make it a lot worse.
@benw: It’s not a threat, it’s a reality. I know it is, I lived it.
@Kylroy: yeah, me too. I’m only alive because of a long, uphill battle against insurance companies. My inclination is to help people game the system in whatever way possible.
ETA: I sure did, whatever it took to stay alive.
@benw: Were you working to make the insurance company actually meet it’s obligations to you, or were you looking to find a reason to enroll? And was this post-ACA?
100 years ago the only relationship that existed in the medical realm was between the doctor and the patient. Then, insurance companies inserted themselves between the doctor and patient without adding any benefit to medical outcomes. This, of course, distorted the economics of the relationship and added huge amounts of overhead. Until we move to universal, single-payer health care coverage these market distortions will continue to exist and probably get larger absent significant regulation. The problem is the insurance companies, not the patient.
I had to supply a marriage certificate just to enroll in employer-provided insurance (along with a birth certificate for I-9 verification).
It does have the same problem as getting documentation for voter ID: getting your hands on those certificates can involve significant fees. Which, as it turns out, are often going to Elsevier, the same greedheads who are ruining scientific publishing.
“100 years ago the only relationship that existed in the medical realm was between the doctor and the patient.”
Because100 years ago the doctor’s toolkit consisted of painkillers and bonesetting, and a typical person can pay for that out of pocket. Open heart surgery? Not so much.
“Then, insurance companies inserted themselves between the doctor and patient without adding any benefit to medical outcomes.”
Actually, it started with the Blue Cross and similar organizations cropping up during the depression when people couldn’t even afford the limited services doctors could then provide. Spreading risk enabled doctors to actually get paid. And then WWII wage restrictions meant employers could not entice new employees with higher wages *but* could offer health insurance.
“Until we move to universal, single-payer health care coverage these market distortions will continue to exist and probably get larger absent significant regulation. The problem is the insurance companies, not the patient.”
Yet somehow nations like Germany manage to have universal coverage and insurance companies, all while getting better outcomes at lower costs than the U.S. This kind of negates your contention that insurance companies are the root of all evil in American healthcare.
On the agenda: running with West Philly Runners at 6:30 pm, then off to the Gojjo bar at 45th and Baltimore Ave in West Philly for old time music, upstairs from 8-11 pm.
@Brendancalling: sounds like a good evening
Shorter: It’s gonna get harder to get health insurance.
Richard, I’m sorry if this is obvious, but will the verification of changes in circumstances only affect people who are on a public exchange or applying for medicare/medicaid? I’m wondering if this will be something that needs to be tracked for employees covered through their employer.