CMS recently released a final interim rule that eases some restrictions laid on CO-OP health insurers. Experts believe that it is an attempt by CMS to keep CO-OPs from financially sound. The final rule also features a few changes to the special enrollment periods (SEPs) for health exchange sold plans.
The Consumer Oriented and Operated (CO-OP) project is a part of the Affordable Care Act (ACA), designed to help new state-based non-profit insurance providers enter the market without any difficulties. Though the ACA issued billions of dollars for the CO-OP program, many of the insurers failed to survive in the thrust.
The financial issues of the CO-OPs are accredited to the decline in payments from the risk corridor program, which was meant to protect them from any abrupt loss for the first few years. Where big insurance companies compensated their initial losses with their financial stability in the market, new ventures failed to do so and were forced to close their functions.
The interim final rule by CMS would try to make up for the failures of the CO-OPs, modifying many existing rules in order to help the remaining health insurers stay in the game. The new rule eases earlier restrictions on CO-OP board compositions, and allows them to accept funding from private parties (if they face an imminent financial loss). Besides that, the interim rule no longer requires CO-OP board members to be CO-OP members.
The new rule also offers a grace period to CO-OP health insurers for meeting the benchmark of selling federally certified qualified health plans (QHP), as long as they provide a silver and gold tiered QHP and a timeline on how they will meet the requirement. Moreover, the special enrollment periods (SEPs) set by ACA is also reduced under the interim final rule, which allow patients to buy a plan outside the open enrollment period with no associated penalties.
A CMS spokesperson said that they expect the new rules to make an immediate effect on the enrollment of SEPs. Furthermore, he said that the agency would closely monitor the CO-OPs functions under the new regulations, and act promptly if any intervention is needed.