MNsure tightens rule on 'special' enrollments

People seeking health insurance via MNsure outside the standard open enrollment period will now be required to document their eligibility for "special enrollment" before they can buy a policy.

MNsure said the tighter rules should help make sure people don't wait until they are sick to buy coverage, a practice that drives up costs for others.

The change follows concerns among insurers about potential "gaming" in the state's market where individuals buy coverage.

"This follows what the federal government is already doing, and what many other states are, as well," said Jeremy Drucker, a MNsure spokesman. He added in an e-mail: "If it slows down the process at all, it would be by days."

MNsure is an option for the roughly 170,000 Minnesotans who buy individual policies, a group made up primarily of those under age 65 who are self-employed or don't get health insurance from their employers.

Most who buy coverage through MNsure do so during an open enrollment period that typically stretches between November and January. The exchange allows for enrollment at other times in special circumstances such as the birth of a baby, marriage, a move to a new area or the loss of other health coverage.

Previously, MNsure let individuals enroll in coverage if they attested to eligibility for special enrollment, and then supplied required verification within 35 days. About 14,000 people last year bought insurance through MNsure during a special enrollment period.

In response to concerns about special enrollment abuse, MNsure last year initiated a study that looked at special enrollments for roughly 1,500 people across some 1,000 households between February and April. The study found that 24 percent of households did not provide sufficient documentation.

Of those households, 43 percent received one month of coverage, MNsure said, while 51 percent received two months of coverage. The study did not look at how much health care those enrollees used before being cutoff.

While the findings don't prove that gaming was taking place, Drucker said, they show "sufficient evidence of noncompliance" that justifies the change. The pre-enrollment verifications are beginning this month.

"This isn't additional paperwork, they'll just need to send it to us before the enrollment is complete," Drucker said via e-mail. "Once the necessary documentation is provided by the consumer their enrollment is finalized and coverage can take effect based on the date of their original application."

Since major changes arrived in 2014 for the individual market, insurers have voiced concerns that consumers might be using relatively lax rules during special enrollment periods to finance short-term health care needs before stopping premium payments. The speculation by insurers, however, hasn't included much documentation showing how big the problem might be.

At Eagan-based Blue Cross and Blue Shield of Minnesota, officials say individual market membership generally declined by more than 10 percent through the course of the year.

"It's likely that many individuals dropped coverage after obtaining needed medical care, in addition to the [special enrollment period] becoming a possible loophole with limited verification," said Scott Keefer, vice president of public affairs, in a statement. "In a nutshell, the entire system was fairly leaky and did not operate like other health insurance segments."

At Minnetonka-based Medica, officials said individuals who enroll through special enrollment periods have higher claims expenses than those who sign up during open enrollment.

"We believe improving the process by which a person's qualifications for a special enrollment period are verified is a good idea," said Geoff Bartsh, a Medica vice president, in a statement.

MNsure was launched as part of the federal Affordable Care Act (ACA), which eliminated pre-existing condition exclusions for individuals seeking coverage. Beyond eliminating that barrier, the health law included a requirement that almost all Americans carry health insurance or pay a tax penalty.

Last year, Republicans in Congress eliminated the ACA tax penalty beginning in 2019. Drucker said the change makes pre-enrollment verifications even more important.

"This is one of the last remaining structural mechanisms we can use to ensure that people aren't waiting to sign up for coverage until they're sick, which drives up rates for everyone," he said.

The MNsure study found that 90 percent of special enrollments stemmed from the loss of what's defined in the ACA as "minimum essential coverage." To help verify such losses, MNsure currently has a request for proposals from vendors for technology that could verify the loss of employer and nonemployer coverage for consumers seeking individual coverage.

Vendor responses were due Monday.

Christopher Snowbeck • 612-673-4744