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February 26 2016

Insurers: That Lax ObamaCare Enrollment Process Is Really Costing Us

Patrice J. Lee

The Obama administration has always been more interested in hitting enrollment targets for ObamaCare than in ensuring subsidies only go to those Americans who actually qualify for taxpayer help with their health insurance policies.

But the administration has been pressured by insurance agencies into looking into fraud in the application process, and this might hit them where it hurts--in the enrollment figures. That's one reason we aren't holding our breaths and expecting that the crackdown will be as relentless as it might be.

As we know, open enrollment season is the limited window of time for customers who want to purchase or re-enroll in ObamaCare through Healthcare.gov for the next year. If a customer neglects to sign up during that time they have to wait until the next open enrollment, unless they have special circumstances or life-qualifying events, such as birth, adoption, marriage, a permanent move, or their healthcare coverage being dropped.

Some customers have been gaming the system to get coverage using special enrollment periods. They avoid signing up for coverage but secure healthcare when they get sick or need medical treatments and promptly drop that coverage once the plans have paid their bills. Until now, a person didn’t need to provide any documentation or supporting evidence of a life-qualifying event.

Not surprisingly, health insurers are angry that lax rules and verification on the part of the government are causing them to pay out more in benefits than they are collecting in premiums. After complaining, the Administration responded with new rules to overhaul the entire special enrollment process. They will now institute a verification process that requires applicants to provide documentation of qualifying events they claim such as a birth or marriage certificate.

CNBC reports:

Insurers said that practice was hurting the profitability of their Obamacare plans because people who used the special enrollment periods in that manner were costing more in benefits paid out than what the customers paid in in premiums.

America's Health Insurance Plans, an industry trade group, responded to the announcement of rules by saying, "This new documentation process is a much-needed step in the right direction."

"While we are still reviewing the operational details, including the timing associated with verification, this latest effort will ensure qualified enrollees have access to coverage during important life transitions while also cutting down on the abuse and misuse of special enrollment periods which lead to higher costs for consumers," said Clare Krusing, AHIP's spokeswoman.

We reported yesterday that a federal watchdog group has said the Obama Administration has been “passive” on ObamaCare fraud overall.

Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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