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Obamacare Marketplaces Remain Vulnerable to Fraud, New Government Audits Find

Don’t worry if you don’t exist, you can still get Obamacare.

 Two new government audits reveal that the nation’s Obamacare marketplaces remain “vulnerable to fraud,” after investigators successfully applied for coverage for multiple people who don’t actually exist.

In several cases this year, fake people who hadn’t filed tax returns for 2014 were still able to get Obamacare tax credits to help pay their monthly premiums for 2016 coverage. This year is the first in which applicants for those subsidies had to have filed their federal tax returns from prior coverage years to obtain such assistance.

The audits, which looked at the 2015 and 2016 Obamacare coverage years, echo previous findings about the potential for fraud, and the failure to detect it, on the government-run exchanges that sell individual health plans. The audits come less than two months before Obamacare’s fourth open enrollment season, for 2017 coverage, is scheduled to begin.

Congressional critics of Obamacare seized on the audits as further proof that the health-care reform law is not working as promised, and that the Obama administration was being lax in securing the insurance marketplaces against fraud.

“It’s deja vu all over again as it seems the situation only continues to get worse, and we all are paying the price,” said House Energy and Commerce Committee Chairman Fred Upton, R-Mich.

Read the full article here.

Detailed Obamacare Blue Cross Enrollment–About Half the Enrollment Doesn’t Get a Subsidy!

I was struck by this comment coming from one of Obamacare’s most vocal supporters, Vox’s Sarah Kliff:

Obamacare’s insurance expansion is on the path to looking like other safety net programs we know, offering limited services to a predominantly low-income population.

She might be right about Obamacare devolving into a low-income style safety net program. But she couldn’t be more wrong about the people who have no choice but to buy Obamacare if they want health insurance.

In the September 2016 issue of the trade publication, The AIS Report on Blue Cross and Blue Shield Plans, reporter Steve Davis did something no other reporter I know of has done. He called a number of Blue Cross plans and asked how many of their Obamacare individual health insurance policyholders get a subsidy and how many do not. His report covers 26 state Blues plans.

Why is this important?
First, the administration keeps telling the press that 85% of exchange participants get a subsidy. That is technically correct but awfully misleading. I have been arguing for years that about half of the Obamacare individual market does not get a subsidy when you include all of those customers that purchase their individual health insurance policies off the exchange.

As an administration spokesperson put it a couple of weeks ago, “Even in a scenario where all plans saw double-digit rate increases, the vast majority of consumers would continue to have affordable plans.” If you believed that line, you will be quite surprised by what Davis found.

Read the full article here.

Feds plan to screen Obamacare customers for special enrollment periods

Scamming the Obamacare system could soon get even harder.

 Federal health regulators on Tuesday said they plan to screen at least some people who apply for Obamacare health insurance coverage on HealthCare.gov during so-called special enrollment periods in 2017 to verify their eligibility first.

At the same time, those regulators revealed that a new confirmation process implemented earlier this year — which required people to provide documentation to confirm their eligibility for special enrollments — has led to a nearly 15 percent drop in the number of such sign-ups compared to the same period last year.

Special enrollment periods are supposed to be open to people who experience a so-called qualifying life event, such as divorce, job loss, birth of a child or relocation, or other limited circumstances. In the past, they also have been open for people who only during tax season learned they faced a tax penalty for failing to have some form of health coverage.

Special enrollments occur outside of open enrollment, which for 2017 plans will run from Nov. 1 until Jan. 31, 2017. Most people are barred from obtaining individual health plan coverage outside of open enrollment.

Read the full article here.

Insurers Move to Limit Options in Health-Care Exchange Plans

Under intense pressure to curb costs that have led to losses on the Affordable Care Act exchanges, insurers are accelerating their move toward plans that offer limited choices of doctors and hospitals.

A new McKinsey & Co. analysis of regulatory filings for 18 states and the District of Columbia found that 75% of the offerings on their exchanges in 2017 will likely be health-maintenance organizations or a similar plan design known as an exclusive provider organization, or EPO. Both typically require consumers to use an often-narrow network of health-care providers—in some cases, just one large hospital system and its affiliated facilities and doctors.

Only a quarter of the exchange plans next year would still be broader designs such as preferred-provider organizations, or PPOs, which generally offer larger selections of doctors and hospitals and include out-of-network coverage, the McKinsey analysis found.

Insurers offering HMO-style exchange plans “tend to have higher margins and lower rate increases,” said Erica Coe, a McKinsey partner who leads the firm’s health-reform research effort.

For consumers like Alexei Solcanu, a software engineer who lives in Matthews, N.C., a shift to a plan with a different network could mean changing health-care providers at a critical time. Mr. Solcanu’s wife is pregnant, with a baby due in January. His current insurer, Aetna Inc., AET -1.14 % is exiting the state’s ACA marketplace next year and he doesn’t know whether the remaining choices will include his wife’s doctor and hospital. “I’m worried,” said Mr. Solcanu, 26. “That’s my biggest concern.” The details of 2017 exchange plans aren’t expected to be available to consumers until October.

Read the full article here.

CMS Releases 2018 Marketplace Rule and New Actuarial Value Calculator

On Monday, the Centers for Medicare and Medicaid Services (CMS) released the proposed 2018 Notice of Benefit and Payment Parameters. The 294-page proposed regulation provides guidance on both individual and SHOP marketplaces requirements, changes to the risk adjustment programs for 2017 and 2018, participation requirements for bronze, silver and gold plans, network requirements, special enrollment periods, direct enrollment, and numerous other issues. In addition to the marketplace rule, the administration concurrently released a draft actuarial value calculator and methodology for 2018.

Read the full article here which outlines some of the changes for agents and brokers, Medical Loss Ratio (MLR), Special Enrollment Periods (SEPs), Age-Rating, User Fees, Formulas, Limits, Risk Adjustment, Network Adequacy, and more.