By Sarah Ferris - 01/19/16 05:33 PM EST
Federal health officials are promising to clamp down on special ObamaCare enrollment periods that have allowed customers to buy coverage after the government’s deadline, something that has frustrated insurance companies.
The Obama administration announced Tuesday that it will end “unnecessary” exceptions for people looking to buy coverage after the deadline, such as people who were affected by last year’s Social Security tax error or legal residents who were subject to a system error in calculating their subsidies.
The insurance industry, however, is not satisfied with the updated policy. Even with the tweaks, the administration would still allow people with an “exceptional circumstance” — which could mean a serious medical condition — to sign up after the deadline.
"While this is an important first step, more needs to be done to validate special enrollment requests. It's critical that there is a process in place to avoid potential abuse of special enrollment periods in order to ensure a stable, affordable market for consumers,” Clare Krusing, a spokeswoman for America’s Health Insurance Plans, wrote in a statement.
The Centers for Medicare and Medicare Services (CMS), the agency in charge of the process, said it will conduct an audit of plan selections during the special sign-up periods “to help us to inform future policy and operational improvements to enhance program integrity.”
In an effort to clarify existing rules, the administration said it will make sure that customers who have recently moved can only use a special enrollment period if they are planning to permanently relocate — and not just temporarily, such as being admitted to a hospital for treatment.
The administration said the updated policy will ensure that “that special enrollment periods serve the purpose for which they are intended and do not provide unintended loopholes.”
“We are taking initial steps in adjusting how special enrollment periods work — and will continue to make further adjustments in the future based on what we learn from continued monitoring and analysis of special enrollment period usage and compliance,” CMS wrote in a statement.
One top executive at Aetna recently wrote to the Department of Health and Human Services, urging officials to reconsider the policy because it allows customers to avoid paying premiums until they become sick.
“Many individuals have no incentive to enroll in coverage during open enrollment, but can wait until they are sick or need services before enrolling and drop coverage immediately after receiving services, making the annual open enrollment period meaningless,” Steven B. Kelmar, an executive vice president of Aetna, wrote to Secretary Sylvia Mathews Burwell.
The insurance industry’s mounting cost concerns about the extra sign-up periods were recently featured in the New York Times.
The acting head of CMS, Andy Slavitt, said one day after the story published that the agency was readying action on closing some special enrollment periods.