Click here to read the full publication by Peter Nelson from the Center of the American Experiment.

The ACA markets are poised for significant regulatory change that will have a material impact on the carriers and distributors in the ecosystem. The new Administration’s perspective is wildly different than the last Administration and we are going to start to see these changes show up very quickly.

Although I like making predictions of what can happen, in this case I don’t really need to, because the Administration is telling us very clearly where they are headed. Peter Nelson just started as the new Director of the Center for Consumer Information and Insurance Oversight (CCIIO) that has oversight of the ACA markets. He is a true expert in the ACA and clearly has a systems level understanding of the market dynamics.

He recently authored a publication that outlines his exact perspective on how the last Administration approached the ACA and exactly what he identifies as the regulatory and administrative changes that have impacted market stability and affordability. He highlights five regulations where the regulation actually stipulates the potential cost as well as nine more where it is either silent or suggests it won’t have an impact.

The Five are:

1. Narrow de minimis variation in actuarial values- Premium impact: 2 percent due to increased utilization
2. Eliminate pre-enrollment special enrollment period (SEP) verification for all but one SEP type.- Premium Impact: 1.5 percent due to increased adverse selection
3. Allow states to “update and modernize” their essential health benefit (EHB)- Premium Impact: 1 percent due to increased utilization
4. Establish a permanent monthly SEP for people with incomes below 150 of percent FPL-Premium Impact: 3 to 4 percent due to increased adverse selection
5. Proposed rule to require health plans to expand access to a wider variety of contraceptive items at no cost sharing-Premium Impact: 0.1 percent due to increased utilization

Additional rules he references include:

• Set the premium adjustment percentage to track only group market premium changes
• Rescind income verification when trusted data sources show the applicant’s income is below 100 percent of FPL
• Extend the Open Enrollment Period (OEP)
• Require insurers to offer Exchange plans with standardized plan options
• Require Exchanges to wait to discontinue APTC subsidies until a tax filer has failed to file taxes and reconcile APTC for two consecutive years
• Undermine insurers’ ability to collect past-due premiums
• Require Exchanges to accept an applicant’s attestation of projected income without verification when there is no tax information

Below is a link to the publication. I haven’t analyzed what might be accomplishable with executive or administrative fiat vs a longer regulatory unwinding, but its a virtual certainty that movement on many of these is coming.

–Sam Melamed, CEO at NCD

Click here to read the full publication by Peter Nelson from the Center of the American Experiment.