By Jeffrey H. Brochin, J.D.
About half (53 percent) of the 2015 federally facilitated exchange (FFE) enrollees maintained continuous health insurance coverage throughout the year according to a Government Accountability Office (GAO) report. The remaining 47 percent of FFE enrollees started their coverage later or ended it during the year and they averaged 5.0 months of coverage. However, most troubling was the GAO’s finding that CMS did not have reliable data on issuer-generated terminations of coverage for enrollees’ nonpayment of premiums. Although CMS and issuers share data on the terminations each generates and they reconcile their data on a monthly basis, CMS does not require issuers to consistently report data on the reasons for terminations. The study recommended that CMS ensure that it has complete data on terminations of coverage for nonpayment of premiums, and that it maintain a transparent process to reconcile discrepancies and ensure the accuracy of the data (GAO Report, GAO-18-269, March, 2018).
Why the GAO conducted the study. The GAO was asked by Congress to examine the extent to which federally facilitated exchange (FFE) enrollees maintained their coverage and paid their premiums during the plan year. Coverage through the year was measured as coverage which began between January 1 and March 1, 2015, and maintained it through December 31, 2015.
How the study was conducted. The GAO examined (1) the extent to which FFE enrollees maintained coverage in 2015 and (2) the extent to which CMS has reliable data on termination of enrollees’ coverage for nonpayment of premiums. The GAO analyzed CMS’s 2015 FFE enrollment data (the most recent year of available data), interviewed CMS officials and selected issuers, and reviewed applicable laws and guidance from CMS.
What the GAO study found. The GAO determined that approximately 4.9 million enrollees (53 percent of the 9.2 million FFE enrollees who were enrolled in 2015) maintained continuous coverage throughout the year. Those individuals therefore had 10 or more months of continuous coverage, with an average length of coverage of 11.6 months. Most of those enrollees (83 percent) re-enrolled in coverage by June 2016.
The remaining 4.3 million enrollees (47 percent of the FFE enrollees in 2015) did not maintain continuous FFE coverage throughout the year, and their average length of coverage was about 5.0 months and, for most (72 percent), coverage ended prior to the end of the year. Also, of the 4.3 million enrollees, 38 percent re-enrolled in exchange coverage for 2016, although enrollees that held coverage through the end of the year—regardless of their length of coverage—were far more likely to have re-enrolled than enrollees whose coverage ended prior to the year’s end.
Some enrollees who received Advance Premium Tax Credits (APTC), which reduced the cost of coverage for eligible individuals, intentionally stopped paying their premiums before the end of the year to take advantage of the 3-month coverage grace period allowed by law while still meeting requirements for the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) individual mandate.
Troubling lack of reliable data. The GAO study also found that CMS failed to maintain reliable data on issuer-generated terminations of coverage for enrollees’ nonpayment of premiums. Officials informed the GAO that they do not track the data because they are not critical to ensure the accuracy of the federal subsidy amounts—which is the main function of the monthly reconciliation process. Further, CMS lacks a transparent process to ensure the accuracy of the data, because the monthly reconciliation files transmitted between CMS and issuers do not include a place to capture data on termination reasons. Issuers were therefore unable to ascertain whether the data they submit on the reasons for termination match CMS’s data, and they were therefore unable to make corrections where necessary.
Conclusions and recommendations. CMS’ lack of reliable data on terminations for nonpayment limits its ability to effectively oversee certain federal regulations. For example, because CMS is not systematically tracking the data, it cannot tell whether enrollees applying for coverage under a special enrollment period had lost their coverage for nonpayment of premiums—in which case they would be ineligible for the SEP per federal regulations. CMS could capitalize on its existing process, already familiar to issuers, by adding a variable to the monthly reconciliation file that captures data on termination reasons. By taking this step, in addition to requiring issuers to report the data, CMS could help ensure that it has reliable and transparent data on terminations of enrollee coverage for nonpayment of premiums, and it could use such data to assess the effects of CMS policies and the overall stability of the FFE.
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