Biden Administration Proposes Requiring Standardized Plan Designs on ACA Exchanges
The Biden administration is aiming to require insurers to offer standardized plan designs on the Affordable Care Act’s (ACA’s) exchanges. As part of the Centers for Medicare & Medicaid Services’ (CMS’) 2022 Notice of Benefit and Payment Parameters rule, payers would have to offer standardized plan options for every product network type, plan tier type and plan classification. CMS said the goal is to allow consumers to have an easier shopping experience. As standardized plans share a uniform cost-sharing structure, it’s simpler to compare across plans.
“We are building a more competitive, transparent and affordable health care market,” said Department of Health and Human Services Secretary Xavier Becerra. “At the end of the day, health care should be a right for everyone, not a privilege for some.”
More on Rule
Under the proposed rule, HHS is offering several changes to premium and risk adjustment rates as well as the risk adjustment model. HHS is proposing the following changes to the risk adjustment model to begin in benefit year 2023: (1) the addition of a two-stage weighted approach to the adult and child models; (2) the removal of the current severity illness factors from the adult models and the addition of an interacted hierarchical condition category (HCC) count model specification to the adult and child models; and (3) the replacement of the current enrollment duration factors in the adult models with HCC-contingent enrollment duration factors.
HHS also proposed the following changes to model recalibration for the 2023 benefit year risk adjustment models: (1) using the 2017, 2018, and 2019 enrollee-level EDGE data for model recalibration; (2) applying a market pricing adjustment to the plan liability associated with Hepatitis C drugs; and (3) using the fourth quarter prescription drug categories mapping document for each benefit year of recalibration data, with the exception of 2017 enrollee-level EDGE data.
HHS is also promoting several policies to promote health equity. As a result of the Department’s 2020 final rule implementing section 1557 of the ACA, gender identity and sexual orientation were removed from being included as the bases for discrimination and subject to non-discrimination protections. HHS is now proposing to once again include these terms in its nondiscrimination policy, effectively prohibiting Marketplaces, issuers, agents, and brokers from discriminating against consumers based on sexual orientation and gender identity. Further, the proposed rule seeks to refine the essential health benefits (EHB) nondiscrimination policy to require that benefit designs be based on clinical evidence, including factors surrounding discrimination based on age, health conditions, and sociodemographic factors.
Additionally, HHS is proposing to conduct network adequacy reviews in all FFE states, with the exception of states that have their own standard already in place as stringent as the federal standard which also conduct their own reviews. Reviews are to take place prospectively during the Qualified Health Plan (QHP) certification process. Issuers that are unable to meet the standards would be able to submit justification to explain why this is the case and how they are aiming to do so in the future. Further, the HHS is proposing to collect data from insurers on which of their network providers offer telehealth services.
Also under the proposed rule, issuers in the FFEs and SBE-FPs would be required to offer plans with standardized cost-sharing parameters at every product network type, metal level, and throughout every service area that they offer non-standardized options in PY 2023. For example, an issuer must offer a standardized gold plan in a particular service area if that issuer offers a non-standardized gold plan in that same service area. To this end, HHS has created two sets of standardized plan options at all of the levels of coverage, each designed specifically to meet the cost-sharing laws in different sets of states. Additionally, HHS is also proposing to display these standardized options differentially on HealthCare.gov.