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Thursday, September 15, 2016

New Process for Verifying SEP Eligibility Could Deter ACA Enrollment

Elizabeth Hagan

Associate Director of Coverage Initiatives

Kara Nester

Policy Analyst

The Centers for Medicare and Medicaid Services (CMS) recently announced plans to implement a pilot project in 2017 that could change the enrollment process for some consumers seeking health coverage through special enrollment periods (SEPs). While details of the proposed pilot project are not finalized, Families USA is concerned that these changes could ultimately lead to fewer people enrolling in coverage.

CMS has made several changes to special enrollment periods in response to health insurers’ complaints

CMS announced its plans to test a new enrollment process—which would apply to certain people seeking insurance through the federal marketplace (HealthCare.gov)—in response to insurer concerns about consumer abuse of SEPs. These changes are the latest in a series CMS has rolled out affecting SEPs, including tightening requirements and instituting a new confirmation process

While insurers claim that consumers are abusing SEPs and that some consumers enrolling through SEPs are ineligible, there is little evidence to support these claims of abuse. 

In fact, many consumers don’t know about opportunities to enroll in health coverage outside of open enrollment periods, as evidenced by the fact that roughly 5 percent of those eligible for SEPs in 2015 actually enrolled

What’s in the proposed verification process pilot? 

This newest change would require some consumers to verify their eligibility for a SEP before being enrolled. This process differs from the process most recently implemented—which requires consumers to submit documentation for the five most common SEPs after enrollment. 

Instead of requiring an applicant to submit documentation (which can be done after her or his enrollment is complete), this new process will require verification of the applicant’s eligibility before the applicant can enroll in coverage. 

While these changes currently only affect those selected through the pilot project, CMS is seeking comment on how the pilot is structured and who will be included. 

We are pleased that CMS is developing a test pilot to evaluate before making more sweeping changes, but we have significant concerns about developing any policies that negatively impact consumers’ ability to maintain continuous coverage. 

The pre-enrollment verification process could delay consumers’ access to health coverage

This new proposal could jeopardize consumers’ access to coverage and create gaps in their health coverage if the process delays enrollment. Any verification process that delays enrollment will prevent some consumers from gaining or maintaining needed coverage. 

While we have had concerns about requiring consumers to provide documentation to prove eligibility for SEPs, we are particularly concerned about the possibility of requiring documentation to be submitted before gaining access to coverage. 

We recommend that the pilot use existing data sources to verify a consumer’s eligibility for a SEP, which will allow for timely enrollment processes without extra burden on the applicant. 

Ability to comment on proposal 

Families USA is submitting comments to CMS on the proposed pilot and we encourage other groups to join us. We will urge CMS to exercise caution and to develop a pilot that can be fully evaluated before implementing similar processes more broadly. CMS is accepting feedback at SEP@cms.hhs.gov through Tuesday, September 20. Update: See Families USA's comments.

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