Understanding CMS's Proposed Changes: Shorter Enrollment Period & Removal of the 150% SEP

The Centers for Medicare & Medicaid Services (CMS) recently proposed two significant changes to the ACA Marketplace: shrinking the annual Open Enrollment Period (OEP) and removing the Special Enrollment Period (SEP) eligibility for individuals with incomes below 150% of the Federal Poverty Level. Let's unpack what this means, highlighting the pros, cons, and the potential impact on ACA agents and customers alike.

While these are not all the changes that were proposed, these were the largest changes that we believe deserve some spotlight. And please note, these are all proposed changes, it still needs to be reviewed, and fully approved!

Shrinking the Enrollment Period

Pros:

• A shorter enrollment period might encourage faster decision-making, leading to earlier enrollment and potentially more stable premium rates.

• It aligns more closely with enrollment timelines seen in employer-based health plans, reducing confusion.

Cons:

• A shorter window could put pressure on consumers, leading to rushed decisions or missed opportunities for coverage.

• Agents could experience increased workloads in a condensed timeframe, requiring better planning, staffing, and efficiency to manage demand effectively.

Removal of the 150% Income SEP Enrollment Qualifier

Pros:

• Removing this SEP could reduce the potential for adverse selection, as individuals might be less inclined to wait until they are sick to enroll.

• It may promote continuous enrollment, leading to more consistent preventive care and potentially more stable marketplace premiums.

Cons:

• Eliminating this SEP restricts flexibility, potentially increasing uninsured rates or delaying necessary care until conditions worsen.

• Lower-income individuals lose crucial flexibility, particularly when discovering their medications or preferred doctors are not adequately covered after enrolling in a plan, limiting their ability to adjust.

• ACA agents might lose opportunities to serve individuals who rely on this flexibility, affecting overall enrollment volume.

• Unfortunately, some unethical practices might still occur. "Bad actors" or unscrupulous agents might fraudulently use other SEP qualifiers—such as falsely reporting changes in zip codes, loss of coverage, or family status changes—to continue enrolling clients year-round.

Impact on ACA Agents and Customers

For ACA agents, these changes require rapid adaptation. With a shorter enrollment window and fewer SEP opportunities, agents must proactively educate clients about timelines much more effectively. Clients may also be frustrated to learn they can no longer change their plans simply because of their income bracket. This will also shift the focus for agents to cram as many enrollments as possible during the new proposed OEP period instead of growing their book month over month using the 150% SEP.

For customers, thorough initial consultations become even more critical. Customers need clarity upfront to ensure their selected plans align closely with their healthcare needs, given the reduced flexibility to switch coverage mid-year.

Final Thoughts

While these proposals aim to enhance marketplace stability, they carry significant trade-offs, particularly for consumers needing flexibility and agents serving them ethically. Being well-informed, prepared, and vigilant about potential fraudulent activities can help both groups successfully navigate these shifts.