Connecticut’s health insurance exchange plans to get tougher on those seeking to sign up for insurance coverage outside the open enrollment period, following concerns that people signing up midyear have been driving up costs for insurers.
People buying individual-market insurance plans are supposed to be able to sign up only during specified periods – the currently open-enrollment period for 2016 coverage ends Jan. 31 – with exceptions for those who experience life changes – like getting divorced, losing a job or a major income change – that affects their insurance.
But Access Health CT, the state’s exchange, has not required those signing up through special enrollment periods to prove they qualified for an exception, instead relying on “self-attestation.” And a survey of Connecticut insurers by Wakely Consulting Group, presented to the exchange’s board Thursday, found that people who signed up during special enrollment periods had significantly higher health care costs and were more likely to drop coverage within three months of getting it than those who enrolled during the regular period.
Going forward, people who seek to sign up for insurance through Access Health outside the open enrollment period will have to show proof that they have a qualifying reason.
Insurance companies pay members’ medical bills using money they collect in premiums, relying on payments from people who don’t use medical care in a given month to help cover the costs incurred by those who do. But if people can sign up and pay for coverage only when they need medical care, insurance companies lose out on income needed to help pay claims. Experts say that can ultimately lead to higher rates for all customers.
“In order to keep the system whole, everyone’s got to be paying throughout the year,” Access Health CEO Jim Wadleigh said.
Wadleigh said it’s not clear exactly how many people signed up through special enrollment periods last year, but he said at some points, thousands did each month. Despite that, overall enrollment in plans sold through the exchange dropped by close to 15,000 people during the course of 2015, from a high of just over 110,000 at the end of the sign-up period.
It’s not clear how many of those who signed up during special enrollment periods qualified, Wadleigh said.
“Some are just working the system as it allowed,” he said.
One insurer said that those who signed up during the fourth quarter of 2015 had such high medical costs, they would need to be enrolled and paying premiums for two to three years for the carrier to break even on the costs, Wadleigh said.
Whether midyear enrollees qualified for the special sign-up window has drawn attention nationally. Late last year, UnitedHealthcare CEO Stephen Hemsley cited higher costs for covering people who sign up outside the open enrollment period when he announced that the company was losing money on exchange business nationally.
Earlier this week, federal exchange CEO Kevin Counihan said the federal marketplace – which serves the majority of states – would eliminate certain criteria for people to qualify for special enrollment periods and tighten enforcement to ensure that they serve their intended purpose and don’t provide loopholes. Aside from a special enrollment period held last year for people who paid a tax penalty for being uninsured, Connecticut did not allow special enrollment for people under the circumstances the federal government eliminated this week.
In Connecticut, people can sign up outside the open enrollment period if they experience a “qualifying life event.” Those are:
- Getting married to someone who is covered by a plan sold through the exchange.
- Having or adopting a child, having a foster child placed in the household or being ordered to provide coverage through child support or a court order.
- Permanently moving to Connecticut from another state.
- Having a change in eligibility for financial assistance, which could include a change in income, people in the household, citizenship or lawful presence in the country, or changes to an employer-sponsored health plan.
- Losing other health care coverage because of a job loss, divorce, expiration of COBRA coverage, losing eligibility for Medicaid or CHIP, or an employer canceling coverage.
In those cases, people have 60 days to sign up.
People who lose coverage because they did not pay their premiums do not qualify for a special enrollment period, but state Healthcare Advocate Victoria Veltri said many people have called her office seeking to re-enroll after not paying their premiums. Wadleigh said hundreds of people in similar situations have called insurers seeking to re-enroll, and in some cases, insurance companies have allowed it if people made the back-payments.