The Obama administration keeps changing the rules on implementing the Affordable Care Act. Insurance companies keep complaining. But they鈥檙e unlikely to grouse about the latest adjustment.
On Tuesday the Department of Health and Human Services to temporarily give insurers a break on the portion of premiums they must spend on medical care or return to policyholders. The switch could shrink consumer rebate checks. But considering what insurers have gone through with balky online marketplaces and shifting regulations, even consumer advocates don鈥檛 seem to object.
The change, reported Wednesday by 聽(subscription required), has to do with the ACA鈥檚 , which requires insurers to spend at least 80 percent of the premiums collected for plans sold in the individual and small group markets聽on medical care or consumer rebates. The idea was to limit what carriers could devote to profits, administrative costs and CEO salaries to 20 percent of the premium pot.
Some insurers say their administrative costs have soared, however, because of the rocky rollout.
Carriers had to scramble when the administration announced that consumers could keep substandard plans that were previously doomed under the health law. The shift required extra mailings and call-center resources for many insurers. Flaws in the government鈥檚 online portals also meant insurers had to find and sign up new customers themselves. Maryland and other states directed frustrated consumers to brokers, who charge insurers commissions.
鈥淗ealth plans made considerable investments in time, resources and manpower to minimize disruption to consumers caused by all the technical problems of healthcare.gov,鈥� said Robert Zirkelbach, spokesman for America鈥檚 Health Insurance Plans, an industry lobby. 鈥淗ealth plans should not be penalized for all the extra work they have done to help consumers through this process.鈥�
As a result, the administration will propose temporarily allowing a higher proportion of premiums to be spent on administrative costs. It鈥檚 unclear exactly which expenses will qualify for the exemption and when the rules will be proposed.
鈥淢any in the industry are doing the best they can under very challenging circumstances,鈥� ,聽project director at Georgetown University鈥檚 Center on Health Insurance Reforms and a frequent industry critic. Increased costs for mailings and call centers, she said, 鈥渨ere聽compounded when the forms insurers received from the federal government with critical data on new enrollees 鈥� called 834s 鈥� arrived riddled with errors, or did not arrive at all 鈥� requiring manual data entry and one-on-one follow up.鈥�
So for insurers participating on the exchanges, she said, 鈥淚 didn鈥檛 have strong objections鈥� to relaxing the rules on costs.