A primary element of the Patient Protection and Affordable Care Act’s reforms of the individual health insurance market is the elimination of medical underwriting and requiring health insurers to accept all applicants for coverage regardless of their medical history and condition, including pregnancy.
For plans sold on the state health benefit exchange marketplace, Section 1311(c)(6) of the law requires the federal government to determine limited to annual open enrollment periods such as those used in large employer group health plans. In addition, Section 2702(b) of the Public Health Safety Act allows health plan issuers selling plans outside the exchange marketplace to restrict enrollment to open or special enrollment periods. Individuals and families can enroll outside these periods only if, for example, they move to another state, lose employer-sponsored coverage or change their family status. Changes in health status are not excepted.
A request this week by California’s U.S. senators, Dianne Feinstein and Barbara Boxer urging their state’s health benefit exchange, Covered California, to add pregnancy to the list of exceptions to the open enrollment timeframe reflects an emerging policy tension point in the implementation of the Affordable Care Act’s individual market reforms.
Nicole Evans of the California Association of Health Plans cautioned “[i]f we start to provide exceptions for people to wait to get coverage until they have a need, you could be undermining the goals of the Affordable Care Act.”
The rationale for restricting enrollment to specified periods of the year is to deter opportunistic enrollment by those who might purchase coverage only when they have a health crisis requiring costly medical treatment and allowing it to lapse once their course of care is completed. Supporters of this policy might argue that allowing enrollment at any time (such as permitted for small group insurance and Medicaid) would convert an insurance product sold in the private market into something more like a government mandated (and subsidized for those who qualify) benefit.
A contrary view is expressed by Anthony Wright, executive director of the consumer nonprofit Health Access California. Wright suggests ending specified open enrollment periods would bring more generally healthy people into coverage offsetting any potential adverse selection, noting those in poor health have the greatest motivation to obtain coverage and are likely already in the risk pool. Wright’s position is reinforced by analysis of 2014 plan year enrollment indicating that those with costly, chronic medical conditions and who might have been denied coverage in the past were among the first to sign up for coverage.
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