Administration moves to strengthen ObamaCare marketplaces

The Department of Health and Human Services (HHS) on Wednesday announced a range of steps aimed at improving the health of the ObamaCare marketplaces. 

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The moves are aimed at improving the mix of healthy and sick enrollees, known as the “risk pool.” A risk pool that has been smaller and sicker than expected has contributed to financial losses for many insurers on the marketplaces. Those losses are one of the reasons many insurers are pushing premiums higher than in previous years, an issue that has been seized on by Republicans in an election year. 

The moves are the first in a series of three actions to be announced throughout June. The second announcement will involve work with state insurance commissioners, and the third will focus on efforts to enroll more young people, the HHS said. 

One step announced Wednesday cracks down on the use of short-term insurance policies. HHS warns that insurers have been using short-term policies, which aren’t subject to the same regulations as other plans, to target young, healthy people, thereby limiting the beneficial effect these healthy people could have on the broader risk pool. 

Under the new rule, short-term coverage must be less than three months long and cannot be renewed at the end of that period. 

The HHS is also announcing a start date for new steps to prevent people from gaming the system by using extra sign-up periods to enroll only once they get sick. 

Beginning June 17, enrollees will have to provide documentation to verify that they actually qualify for whichever extra sign-up period in which they are looking to enroll. 

Additional steps include trying to cut down on documentation problems that can prevent young people from enrolling, helping people transition to Medicare when they reach age 65, and revising the “risk adjustment” program, which redistributes funds from insurers with healthier enrollees to those with sicker ones to guard against heavy losses.