By Jeffrey H. Brochin, J.D.
Changes to health insurance exchange payment parameters and other details would allow greater flexibility related to duties and training requirements for Navigator program and enhance the ability respond to the unaffordability of Exchange plans.
CMS issued a proposed rule setting forth payment parameters and provisions related to the risk adjustment and risk adjustment data validation programs, cost-sharing parameters, and user fees for Federally-facilitated Exchanges (FFEs) and State-based Exchanges on the Federal Platform (SBE-FPs). Among the benefits cited for the proposed rule changes is reduced cost of prescription drugs.
Executive Order to lessen fiscal burden. On January 20, 2017, President Trump issued an Executive Order which stated that to the maximum extent permitted by law, the Secretary of HHS and other heads of executive departments and agencies with authority under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) should exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the ACA that would impose a fiscal burden on any state, or a cost, fee, tax, penalty, or regulatory burden on individuals, families, health care providers, health insurers, patients, recipients of health care services, purchasers of health insurance. The fiscal burden reduction would also apply to makers of medical devices, products, or medications.
Stability of FFEs and SBE-FPs. The proposed rule was drafted in response to issuer exits and increasing insurance rates that have threatened the stability of the individual and small group market exchanges in many geographic areas. The exchanges were established under the ACA in order to allow for qualified individuals and qualified employers to purchase health insurance coverage. The ACA also established the risk adjustment program, which was intended to increase the workability of the ACA regulatory changes in the individual and small group markets, both on- and off-exchange.
Exchange plans deemed unaffordable. Exchange plans may now be unaffordable for people who do not qualify for the ACA’s advance payments of premium tax credits at enrollment. In the first half of 2018, 87 percent of exchange enrollees received advance payments of the premium tax credit, with the amount covering 87 percent of the premium, on average. Sixteen percent of enrollees were enrolled in plans with zero premium after the application of premium tax credit, and another 19 percent of enrollees received a tax credit that covered at least 95 percent of the premium. In previous rule making, CMS established provisions and parameters to implement many ACA requirements and programs.
Focus of proposed rule. In the proposed rule, CMS seeks to amend the provisions and parameters, with a focus on maintaining a stable regulatory environment to provide issuers with greater predictability for upcoming plan years, while simultaneously enhancing the role of states in these programs, and, providing states with additional flexibilities, reducing unnecessary regulatory burdens on stakeholders, empowering consumers, and improving affordability.
Risk adjustment a core program. Risk adjustment continues to be a core program in the individual and small group markets both on and off the exchanges, and CMS proposes recalibrated parameters for the HHS-operated risk adjustment methodology, including several changes related to the risk adjustment data validation program that are intended to ensure the integrity of the results of risk adjustment, and others intended to alleviate issuer burden associated with participating in risk adjustment data validation. The proposed propose updated parameters applicable in the individual and small group markets are in accord with the annual HHS notice of benefit and payment parameters.
Rates for year 2020. CMS is proposing that the user fee rate for issuers participating on FFEs SBE-FPs for 2020 to be 3.0 and 2.5 percent of premiums, respectively. The rates would be a decrease from past years, which would increase affordability for consumers. CMS proposes to use a new premium measure to determine the rate of premium growth for purposes of calculating the premium adjustment percentage for 2020 and beyond, which is used to set the maximum annual limitation on cost sharing, the required contribution percentage used to determine eligibility for certain exemptions under section 5000A of the Internal Revenue Code, and the employer shared responsibility payment amounts under section 4980H(a) and (b) of the IRC.
Public comment on the proposed rule changes must be received no later than 5 p.m. on February 19, 2019.
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