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Centers for Medicare and Medicaid Services Proposes Sweetening Financial Protections for Insurers

By Rebecca Adams, CQ HealthBeat Associate Editor

November 21, 2014 – Last week federal officials proposed a rule that would sweeten financial protections for insurers, establish the dates for the next health law open enrollment period, offer consumers a chance to request being auto-renewed into lower-cost insurance plans, and ask insurers to update provider directories every month.

The next open enrollment period would run a shorter period than the one now underway—from Oct. 1, 2015, through Dec. 15, 2015.

Centers for Medicare and Medicaid Services (CMS) officials proposed to give insurers more money for high-cost cases. Instead of paying for half of the costs of cases in 2015 costing $70,000, as they previously suggested, CMS officials proposed to cover half of the costs that are $45,000 or more, under certain guidelines.

The rule also proposed that insurers pay a tax of $27 annually per enrollee in 2016. For that plan year, CMS officials proposed protections including that the administration would pay half of the costs for patients that incur more than $90,000 in costs, up to a cap.

Centers for Medicare and Medicaid Services officials also proposed that insurers pay a user fee that amounts to 3.5 percent of premiums.

Under the proposed rule, officials are considering giving consumers the option of being automatically re-enrolled in a lower if they decide not to remain in their current arrangement.

Responding to concerns about the accuracy of provider directories by plans, CMS officials said that insurers should put on their websites all of the current providers in a directory, without consumers having to create an account or enter a policy number. The rule proposes that the provider directory be updated at least monthly, and CMS is considering ways to make directories available in standard, machine-readable formats.

Patient advocacy groups may be pleased by a provision in the rule that would give patients more tools for requesting coverage of medications that were not included on the plan's formulary. The rule proposes more detailed procedures for the standard exception process, and would add a requirement for an external review of an exception request if the health plan denies the initial request. The rule also would say that cost-sharing for drugs obtained through the exceptions process must count towards the plan's annual limits on cost-sharing.

Consumer groups who have been asking for more information about insurers' requests to raise rates also may be interested in provisions creating a uniform timeline for both individual and small business plans that are offered both inside and out of the marketplaces. The rule's authors said they wanted to further protect consumers against unreasonable rate increases in the individual and small group markets.

The public will have 30 days to comment on the proposal.

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