Consumers exploit health insurance exchange loopholes

Health plans have found that Affordable Care Act (ACA) exchange plans are plagued with loopholes, and that some consumers are taking advantage.

BarkettSpecifically, John Barkett, director, policy affairs, Willis Towers Watson, Washington, D.C., says consumers have noticed that the public exchanges trust, but do not verify, that a consumer is eligible for certain special enrollment periods (SEPs).

For example, an individual could attest that he recently moved into a new rating area, without having to show proof of a move. This loophole allows consumers to enroll in coverage if they suddenly need healthcare, as they can claim that a qualifying event (e.g., a move) has occurred.

According to CMS, a consumer can also qualify for an SEP for such circumstances as loss of health coverage, losing Medicaid eligibility, changes in family status (e.g., marriage or birth of a child), or other exceptional circumstances.

In addition, Barkett says consumers are taking advantage of a rule that requires carriers to pay for services for up to three months while awaiting a consumer’s first premium payment. Given this, some patients have racked up high medical bills, which their insurance plans covered, and then dropped their plans for the rest of the year.

WolfsonIn other instances, Jay Wolfson, DrPH, JD, professor, public health, medicine and pharmacy; associate vice president, health law and policy; and senior associate dean, Morsani College of Medicine, University of South Florida, Tampa, Florida, says that some consumers have claimed special exemptions, such as being in the Medicaid coverage gap; being an undocumented immigrant; claiming to be a victim of domestic violence; having been affected by foreclosure, eviction, or a natural disaster; or not having sufficient taxable income to be affected by the “tax” penalty, in an effort to avoid having to enroll in a plan or pay a penalty.

 

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