Now that the Affordable Care Act (ACA) is once again on safe legal ground, the Biden administration is doubling down on the law—proposing new policies for the exchange marketplace that could increase coverage rates in both private exchange plans and Medicaid.
The policies, which were included in CMS' proposed rule for the ACA, would roll back many of the changes the Trump administration put in place to pare down spending on the exchanges. They also include some anticipated proposals that give consumers more time to enroll in coverage and take advantage of the American Rescue Plan's enhanced federal subsidies.
What's inside the proposed rule
The proposed rule includes six key changes that the Biden administration believes could increase coverage rates, particularly for low-income individuals.
1. Extend the open enrollment period
The proposed rule would extend the annual open enrollment period by 30 days. Currently, the enrollment period begins November 1 and ends December 15, but the new plan would give people until January 15 to enroll in coverage beginning in 2022. This could be particularly helpful for individuals who are automatically re-enrolled in plans because they would have a few more weeks after receiving their first premium bill to change their plans.
2. Create a new monthly special enrollment period
If finalized, the rule would give exchanges the option to offer a new special enrollment period for people with annual incomes below 150% of the federal poverty level who are eligible for the enhanced subsidies enacted as part of the American Rescue Plan. This means individuals with annual incomes of $19,320—and $39,750 for a family of four—could be eligible to enroll in coverage at select times throughout the year, outside of the main open enrollment period.
3. Reinstate Obama-era navigator requirements
The proposed rule also would reinstate a requirement for navigators to educate consumers and help them with certain post-enrollment actions, such as the eligibility appeals process and how to use their newly purchased coverage. Currently, navigators are authorized to provide such information, but they are not required to do so. In the proposed rule, CMS noted that the agency is investing $80 million in the navigator program, offsetting steep funding cuts enacted under former President Trump. As such, CMS said the new funding should enable navigators to provide these additional services.
4. Revoke Trump-era 1332 waiver guidance that eased requirements
In 2018, CMS under Trump issued new guidance that 1) gave states a larger say in which residents qualify for subsidies to help them purchase health plans, as well as which health plans qualify for subsidies; 2) enabled state governors to apply for waivers without state lawmakers passing legislation to approve it; and 3) enabled states to redirect ACA subsidies to help consumers pay for association and short-term health plans. However, the proposed rule would revoke that guidance, which CMS said could "lead to coverage losses and worsen health disparities." Instead, CMS' proposed rule would allow states to apply for waivers that aim to "increase plan options for comprehensive coverage, reduce premiums, improve affordability, as well as address social determinants of health."
5. Repeal the Trump administration's direct enrollment policy
The Trump-era policy, finalized in January, allowed states to bypass the exchanges and enable consumers to buy plans directly from insurance companies and brokers. CMS' proposed rule notes that no state has expressed interest in a direct enrollment option. However, Georgia is currently pursuing something similar after CMS in November approved a Section 1332 waiver allowing the state to exit the federal exchange without creating a state-run marketplace. CMS is currently reviewing Georgia's plan and asked the state to submit an analysis on the waiver's impact by July 3.
6. Increase new exchange user fees for 2022
CMS proposed increasing 2022 user fees from 2.25% to 2.75% of premiums for federally facilitated marketplaces and from 1.75% to 2.25% for state-based exchanges. The agency noted that while the fees are higher than those finalized in part 1 of the 2022 Payment Notice Final Rule, they are lower than the 2021 user fees currently being collected. CMS said it proposed higher rates for 2022 to help fund consumer outreach and education efforts.
What the proposals mean for health care stakeholders
Broadly speaking, the proposed changes are good news for providers and insurers. For providers, proposals that are designed to increase access to affordable coverage could mean more covered individuals and fewer uncompensated care costs.
For insurers, the recent Supreme Court ruling and the Biden administration's commitment to the ACA should provide some reassurance, particularly for those who have recently re-entered the exchange market after a mass exodus in 2017 and 2018. In fact, the new policies could make the exchange market more attractive to insurers, which means the market could be poised for more growth and competition.
It's also possible the changes could increase Medicaid enrollment as many low-income consumers learn about their Medicaid eligibility while shopping for exchange plans or working with navigators.
Of course, it's important to remember these are still only proposals and the agency is accepting public comment on them until July 28. This is your opportunity to weigh in on the new and returning policies, and share any questions, comments, or concerns you have with the new Biden administration as it builds on the ACA to expand coverage.