The healthcare policy news that has dominated the end of the week follows what was an already policy-filled start of the week for NAHU. On Tuesday, NAHU met with senior officials at HHS to review possible future regulatory actions by the agency, the change in leadership and NAHU’s suggestions to the agency in our comment letter in response to their summer request for information.
Discussions began focusing on fixes to the medical loss ratio that could be done on the agency level to redefine what is included as administrative costs in order to remove agent and broker commissions from the calculation. NAHU has long believed that this is something that HHS has the power to change through regulations; however, the Obama Administration did not agree, which is why NAHU continuously advocated a fix through legislation. With the Trump Administration now in power, we are again requesting a fix through regulation, which would allow us to circumvent the challenges of passing the fix through the continuously fractured Congress.
We also pointed out actions that the agency could take to enforce year-round commission stability. Over the past few years, we have seen carriers decreasing or eliminating commissions from plans mid-year. This has not only caused instability for agents and brokers, but has also resulted in limiting access for consumers to receive expert guidance from licensed benefits specialists, which further leads to the instability of the individual market.
Focusing even more on the individual market, we discussed our repeated request to shorten the grace period for lapsed payments from 90 to 30 days for those receiving subsidies. This better reflects the standard practice for other individual plans, and should not differ for plans just because the enrollee is a subsidy recipient. In addition, we thanked them for the pilot program that was put in place to enforce documentation verification for enrollees coming in through a special enrollment period (SEP), and asked that they expand the SEP verification process to ensure that appropriate actions are being taken before enrolling individuals in an SEP.
HHS officials then turned the conversation to discuss what was, at that time, the pending executive order from President Trump. As we were talking, the ink was not yet dry on the EO, and they were interested in our perspective as the drafting of the executive order was still in progress. Their top concern was the treatment of AHPs in the EO. At the time, we expected the EO to loosen the constraints of AHP rules to allow groups to form and allow the sale of coverage across state lines. NAHU noted that the implementation of the EO would fall to HHS, and we urged them to work closely with state insurance commissioners and the NAIC, which has been very outspoken on the issue of expanding AHPs and as state regulators will be key to any future implementation of these plans.
The other issue relating to the EO that HHS officials wanted to discuss was the treatment of short term limited duration plans. Late last summer, the Obama Administration finalized a rule to shorten the duration of STLD plans to three months. NAHU submitted comments opposing this decision as many times consumers going in to a STLD plan may need longer than three months in some type of coverage because they are unable to qualify for a SEP and are waiting for the beginning of open enrollment or the offer of employer-sponsored coverage, or don’t wish to enroll in expensive COBRA coverage during a gap in coverage. Our position is further supported by members of Congress who have also submitted letters requesting a reversal of the Obama regulation. Following our conversation with HHS officials, the EO released on Thursday included provisions directing HHS to look in to the process to revise regulations on STLD plans to lengthen the time limit beyond the three months provided for in the final rule from the Obama Administration.
Finally, we discussed the changing leadership at HHS. That morning, Deputy Secretary Hargan, who was confirmed by the Senate for that position just last week, had been named as acting secretary replacing Acting Secretary Wright, who was elevated to that position just a few weeks ago following Secretary Price’s resignation. The senior HHS officials we met with are confident that the change in leadership will not affect the agency’s ability to oversee the upcoming open enrollment, nor would the change in leadership halt any progress toward regulatory action by the agency. NAHU looks forward to working closely with HHS as they consider our requests to revise the MLR calculation, stabilize year-round commission for agents and brokers, limit the lapse time for payments by those receiving subsidies, and take actions to implement the directives given to them by the EO regarding AHPs, STLD plans and HRAs.