Not A Crisis - Yet: Individual Insurance Enrollment Closed For Now
Chapter 288 of the Acts of 2010, the small business and individual cost containment law, makes a dramatic change in state insurance law. Until now, Massachusetts had "continuous open enrollment," meaning individuals could enroll at any time. Insurers complained that people were gaming the system, by signing up for short-term coverage only when they needed expensive treatment. The Division of Insurance studied the issue, and concluded this summer that this short-term use resulted in a 1%-2% increase in premiums for the entire merged market.
So the legislature and the Governor included in the legislation a provision providing for set open enrollment periods. The law creates two enrollment periods in 2011: January 1-February 15, 2011, and July 1-August 15, 2011. During an enrollment period, individuals may purchase insurance that will be effective the next month. For example, if a person enrolls on January 1st, 2011, their insurance will be effective on February 1st, 2011. As a result of this switch to fixed open enrollment periods, individuals and small businesses should see some savings in their premiums for 2011.
This new law does not apply to MassHealth, Commonwealth Care, or employer-sponsored, group health insurance plans. It only applies to individuals and their families who purchase insurance directly from a carrier or through the Connector.
Here's the problem: the law provides for a closing of the continuous open enrollment period on October 1 - last Friday. This was not what the legislature intended, and a provision is pending in the supplemental appropriations bill that would delay the effective date of the law until December 1. Everyone expected the bill to pass several weeks ago, but Rep. Karyn Polito, the Republican Treasurer candidate, has been trying to stop the bill by herself (based on the appropriations, not the effective date delay). This morning, the House gave preliminary approval to the bill, by acting just before she breathlessly ran into the chamber. One more House vote is required before the bill goes to the Governor.
So as of October 1, 2010, the Connector and the carriers will accept all individual applications, but they will not process them. The Division of Insurance should also be issuing guidance that allows some of these applications to be processed- those for people who are renewing their current plan or for people who qualify for a HIPAA special enrollment period.
This is not yet a crisis. If the Legislature passes the supplemental budget before mid-October, all new applications held by insurers and the Connector will be processed and coverage will start on November 1, as expected. However, if we get much past the middle of the month, people will be shut out of coverage due to a technical snafu.
If you have any questions about the open enrollment period, please contact DOI.
-Georgia J. Maheras