The following comments were submitted by Richard Besser, MD, Robert Wood Johnson Foundation (RWJF) President and CEO, on the Proposed 2021 Notice of Benefit and Payment Parameters (NBPP).
The NBPP contains proposed changes on a range of topics, and we will limit our comments to a few areas. First, we commend the Department of Health and Human Services (HHS) for their proposed changes in the Special Enrollment Period rules, which are beneficial to consumers. We would particularly like to note our support for the proposal to reduce the waiting time before coverage is effectuated for those enrolling through a Special Enrollment Period. This is an important measure that will reduce gaps in coverage.
We would like to focus the remainder of our comments on the proposed change to automatic re-enrollment for certain enrollees. HHS proposes that enrollees who currently receive Advance Premium Tax Credits (APTC) that equal or exceed the value of the premiums (i.e., enrollees with $0 premiums) who do not affirmatively select a plan during open enrollment should be automatically re-enrolled without their tax credits. This would require them to return to the marketplace to re-determine their eligibility.
We do not support this proposed change in automatic re-enrollment for the following reasons:
- We believe this change would lead many individuals to drop their coverage. A study of enrollment in the Covered California marketplace found that eliminating auto enrollment was associated with a 30 percent reduction in enrollment.
- The reduction in coverage and increase in administrative costs associated with this change would likely lead to increased premiums.
- This change is targeted at low-income individuals, and is therefore inequitable and discriminatory. Enrollees with $0 premiums have incomes between 100 and 130 percent of the federal poverty level. They are in greatest need of subsidized coverage and will have the most difficulty navigating the process of re-qualifying for tax credits.
- The number of people affected by this proposal would not be trivial. In 2019, 1.8 million individuals in states using the federal enrollment platform (healthcare.gov) were automatically re-enrolled. About 15 percent (270,000) received tax credits that covered their entire premium.
- This proposed change is a deviation from an accepted insurance practice. Automatic re-enrollment is standard in all insurance markets, including the marketplace, Medicare Advantage, Medicare Supplemental plans and employer sponsored insurance. It reduces administrative costs and promotes continuity of coverage and stable risk pools. Enrollees have come to anticipate automatic re-enrollment. Suspending this practice for any group will lead to confusion and create an unnecessary barrier; suspending it only for the lowest income group is discriminatory and creates an excessive burden for this group.
While HHS argues that this change is needed to make sure that people do not receive tax credits to which they are not entitled, there are many program integrity controls that are already in place, such as eligibility re-determinations, electronic and document-based verification requirements for eligibility information, periodic data matching, and the reconciliation of APTCs in enrollees’ annual tax filings. Given the existence of these controls, automatic re-enrollment without APTC for this group of low-income enrollees is an unwarranted response to concerns about potential eligibility errors.