Ending abuse of elder enrollees in New Jersey's ACA marketplace: An update

I’d like to provide a couple of updates regarding an abuse in New Jersey’s individual market that I wrote about in September (here and here). the issue in brief: in 2023, the state’s standard individual health plan contract stipulated that insurers could presume that enrollees over age 65 were eligible for Medicare unless they provide written proof otherwise. Failing that proof, the insurer would assume Medicare eligibility and act as a secondary payer to Medicare — paying only a small fraction of the enrollee’s bills while collecting a full premium. In 2023, about 9,000 enrollees via GetCoveredNJ, the state’s ACA exchange, were over age 65.

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As I reported, in May 2023 CMS issued guidance that unambiguously stated that this practice — presuming Medicare eligibility for senior enrollees and acting as a secondary payer — violated ACA requirements. While New Jersey’s Department of Banking and Insurance did not respond to my queries about the New Jersey policy and the CMS guidance, they did respond to the same queries from an nj.com reporter, Karin Price Mueller, whom I approached about the issue. As they told Mueller, on September 27 DOBI issued a directive (described in Mueller’s paywalled article and in my followup post) to insurers in New Jersey’s individual market instructing them to comply with DOBI’s guidance — that is, cease presuming Medicare eligibility and acting as a secondary to Medicare simply because an enrollee was over age 65.

DOBI told Mueller it had instructed all carriers to review the benefits of any individual who is enrolled in a 2023 individual marketplace plan and is age 65 or older to ensure that the policyholders are receiving the appropriate coverage, and that all coverage is consistent with the applicable Federal Guidance. DOBI said it was “working to determine how each carrier implemented the board’s rule change both on and off the marketplace and any possible consumer impact.” Finally, DOBI stated that it would ask the Independent Health Coverage Program (IHC) board (an independent entity) to rescind the provision in the 2024 standard individual market plans.

Now, as to updates:

1. In the case a New Jersey marketplace enrollee over age 65 with which I’m personally familiar, AmeriHealth has in fact been adjusting 2023 provider bills one by one, paying providers as primary rather than secondary insurer, erasing thousands of dollars in the “my cost” column in the claims summary provided to the enrollee.

2. In October, several advocacy groups that are part of the New Jersey for Health Care Coalition sent a letter to DOBI inquiring about followup and enforcement of DOBI’s September 27 directive. The letter expressed concern that while DOBI’s directive went out in September, the standard contract enabling presumption of Medicare eligibility had been in effect throughout 2023 — and the practice of presuming Medicare eligibility in 65 enrollees, as DOBI informed Mueller, has been going on since at least 2016. In response, DOBI specified that the September directive was for the entirety of plan year 2023, retroactive to Jan 1, 2023. That does leave open the question of harm to enrollees for whom New Jersey IHC insurers acted as secondary to Medicare in prior years. DOBI’s letter also clarified what should have been obvious: an eligibility determination by the state ACA exchange, GetCoveredNJ, entitles an enrollee to the full benefits of the policy selected. Insurers never had any business assuming otherwise — but the IHC board allowed them to.

3. Some time in the last few days, the IHC Board published proposed amendments to the standard IHC contracts for 2024. The document does propose rescinding insurers’ ability to act as a secondary payer to Medicare upon presumption of Medicare eligibility:

In accordance with guidance released by the United States Centers for Medicare & Medicaid Services (CMS) in May 2023, the Board proposes amendments which state that in the absence of enrollment in other primary coverage, such as Medicare, a standard plan will not take that other coverage into account when paying for covered services or supplies.* In addition, the Board proposes language mandating that a standard plan will not limit or exclude coverage based on eligibility for other coverage and that coordination of benefits occurs only when the Covered Person is enrolled in other coverage (p. 3).

The standard contract for 2024 states that eligibility for Medicare, let alone presumed eligibility for Medicare, will not preclude the IHC insurer acting as the primary payer:

In the absence of enrollment in other primary coverage, such as Medicare, We will not take that other coverage into account when paying for covered services or supplies. We will not limit or exclude coverage based on eligibility for other coverage. Coordination of benefits occurs only when the Covered Person is enrolled in other coverage (p. 121).

Eligibility for Medicare without enrollment could come into play for people who use the full 6-month window for enrollment in Medicare at age 65, as that window extends three months beyond the month in which one turns 65 (and many people pay much less for coverage in the ACA marketplace than they will for Medicare). The more harmful effect of the now-rescinded secondary payer practice was the presumption of Medicare eligibility at age 65, as a significant number of seniors lack the ten years of taxpaying work history (or marriage to someone with that work history) required for premium-free Medicare Part A coverage. Citizens and legally present noncitizens who are not entitled to free Part A coverage are eligible for ACA marketplace subsidies — and so for full coverage in the marketplace. I suspect, though I lack data, that most U.S. residents over age 65 who are not eligible for free Part A coverage are immigrants.

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* The language here — can’t take the coverage a person doesn’t have into account — recalls the “logic” that runs through Catch 22:

"I didn't say you couldn't punish me, sir."

"When," asked the colonel.

"When what, sir?"…

"When didn't you say we couldn't punish you?…

Clevinger took a deep breath. "I always didn't say you couldn't punish me, sir.”