The Biden Department of Health and Human Services (HHS) released the second portion of the 2022 Notice for Benefits and Payment Parameters (NBPP-2022). The NBPP is the annual “rulebook” for the implementation and operation of the ACA marketplaces and insurance policies. There is a ton of administrative discretion embedded in the ACA on how out of pocket maximums are calculated, how risk adjustment works, when open enrollment occurs, what events qualify for a special enrollment period and dozens of other details.
The new final rule has the following to say on verifying the reason on Special Enrollment Periods (SEP):
HHS is not finalizing the provision to require all exchanges to conduct SEP verification for at least 75% of new enrollments for consumers not already enrolled in coverage through the relevant exchange. HHS agreed with commenters’ concerns around imposing additional administrative burden on consumers, and administrative and financial burden on states at this time. [My emphasis added]
There is a growing literature on administrative burden which is the process of navigating a potentially complex process to show eligibility and compliance with rules. High levels of administrative burden will lead to fewer people receiving the benefit that they seek compared to scenarios of low administrative burden. Administrative burden can be used for either program integrity/anti-fraud purposes or to just not pay out benefits. Increased and specific verification requirements like requiring a letter from a former employer to show loss of employment based coverage instead of accepting an attestation of coverage loss due to job loss from an individual is an example of two different levels of administrative burden.
HHS thinking about administrative burden as a barrier to access and enrollment is a significant change from the Trump Administration to the Biden Administration. Over the past few years, I’ve moved from pricing as the first and primary consideration for enrollment levels towards pricing matters within the context of ease of access and enrollment. This means steps that lower the cost of navigating a complex system will likely have larger enrollment effects than modestly lower net prices while introducing frictions and additional steps can lead to enrollment loss despite silverloading leading to lower net premiums.
Changing the Administration changes the direction on the value of decreasing administrative burden.