Proposals in 2020 Payment Notice to reshape ACA Market

CMS is fixated on reshaping the ACA market that in its 2020 Payment Notice, they proposed a reduction to exchange user fees and potentially eliminates auto re-enrollment and “silver loading,” for which CMS is currently open for feedback.

As per the proposal, the exchange fee would drop from 3.5% to 3% of premiums for plans sold on the federal exchange and from 3% to 2.5% for plans sold on state exchanges. If the rule is finalized with its current proposal, the annual cost-sharing limit for self-only coverage would increase from $7,900 to $8,200 and for family coverage, from $15,800 to $16,400.

Though the rule is intended to lower premiums and costs for customers, the allegation is that the outcome would be the opposite and would significantly increase premiums, and raise out of pocket costs.

Let’s ponder over some of the major changes in the proposal.

Changes to Essential Health Benefit Benchmark Plans

A little extra flexibility won’t hurt, right? That’s what CMS has proposed here. If the proposal is finalized, states would get “additional flexibility” to customize their EHB benchmark plans as well as will be allowed to borrow packages from other states. The CMS factsheet says that instead of being limited to 10 options, states would be allowed to:

1) Choose from the 50 EHB-benchmark plans that other states used for the 2017 plan year

2) Replace one or more EHB categories of benefits under its EHB-benchmark plan used for the 2017 plan year with the same categories of benefits from another state’s EHB-benchmark plan used for the 2017 plan year

3) Otherwise select a set of benefits to become its EHB-benchmark plan, provided that the new EHB-benchmark plan does not provide more benefits than a set of comparison plans and is equal to the scope of benefits provided under a typical employer plan, as required by the PPACA.

So, if this rule is finalized states can address the key issues in healthcare including the opioid epidemic by gearing up behavioral healthcare and substance use treatment.

Eliminating Auto-reenrollment and Changing Other Sign-up Options

CMS is in for a face-shift to the enrollment process by eliminating the ability to automatically re-enroll in existing coverage. This is good news for the customers as they get a chance to update their coverage and premium tax credit eligibility, with a change in their personal circumstances. Currently, the situation is that the customers’ existing coverage will be automatically renewed during the open enrollment period, which was stressful.

Adieu Silver Loading?

With the proposed rule out in the public, it seems like we will be bidding good-bye to “Silver Loading.” For those wondering what “silver loading” is; it is a health policy to help people pay for insurance by taking the higher price of health insurance and tosses them into higher tax credits.

Silver Loading was initially supposed to end CSR Payment to insurers but ended up passing on the costs of higher APTCs to taxpayers. Regarding the proposal to end Silver Loading, the CMS has stated that it “is not proposing any regulatory changes regarding these practices at this time, but we are soliciting public comment to better understand the issues because states have addressed silver-loading in different ways.”

Reducing the footprint of consumer Navigator Program

The intent of Navigators was to provide public education and enrollment assistance to consumers with queries on their health plan options. With the new rule, CMS is proposing turning certain current requirements for delivering a broad array of services into nothing more than “permissible activities,” thereby opening the door for further reductions in funding and support.

In order to better understand the distribution of time between delivering health literacy education and actively helping individuals complete enrollment tasks, CMS is asking state Navigator program to comment on the division of labor within their initiatives.

Pro- ACA groups were quick to criticize the proposal as they believed that if the proposal is finalized, it will raise the premiums and destabilize the market with too many people losing access to healthcare coverage. They are pointing out the loopholes in the rules and are voicing out against the proposal. The final result will be known only after the commenting period, after which it might or might not revolutionize the ACA market.