Tuesday Tidbits

A newly proposed FEHB rule will be published in tomorrow’s Federal Register. The rule concerns an anchronism in the FEHB Act that requires carriers to offer conversion coverage. The provision made sense when there was no ACA marketplace. Since 2014, replacement coverage has been readily available in the ACA marketplace, and the insurers that previously offered conversion coverage backed out of the market. Rather than simply ask Congress to repeal the requirement expressly, OPM has modified the requirements to integrate the conversion requirements with the ACA marketplace. The rule formalizes these modifications.  The proposed rule will be open to public comment for sixty days.

Today the ACA regulators from the Trump Administration proposed a new ACA rule that will permit insurers to offer short term health insurance coverage for up to 12 months. The ACA regulators under the Obama Administration had cut back on that coverage to a maximum of three months purportedly in order to protect the ACA marketplace.

If Congress in 2010 really had wanted to funnel people into the exchanges, it would have cut back eligible child coverage from 26 to 22 and eliminated COBRA and FEHB TCC continuation coverage and patchwork coverage effective for 2014.  Continuation coverage requirements generate losses for employer sponsored plans due to adverse selection. Congress also would given people in the marketplace more choice of coverage rather than dictate the scope of coverage. But that’s not where we are right now.

In other news, Albertson’s, a privately held grocery store chain that also operates under 17 brand names including Safeway, Von’s and Osco-Jewel brands, is buying the roughly 2,000 Rite Aid Stores that fell outside the Rite Aid’s previous deal with the Walgreen’s Boots Alliance.  The Wall Street Journal observes that

All three of the U.S.’s biggest pharmacy chains are now pursuing deals in a sign of the threats they face as customers increasingly shop online. CVS has agreed to buy health insurer Aetna Inc., and Walgreens, in addition to the scaled-back Rite Aid deal, is in talks to buy drug distributor AmerisourceBergen Corp. , The Wall Street Journal recently reported.

The Albertson’s deal which is subject to regulatory approval is expected to close in the third quarter of this year.

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