November 29, 2017

Industry stakeholders weigh in on CMS' proposed rule for 2019 federal exchange plans

Daily Briefing

    Industry stakeholders weighed in on CMS' proposed rule for the Affordable Care Act's (ACA) exchanges for the 2019 coverage year, with insurers raising concerns that the proposed changes could cause instability in the individual and small group insurance markets.

    Proposed rule details

    CMS in the 365-page rule proposed an array of changes to the individual market and the Small Business Health Options Program (SHOP) for 2019, including giving states additional flexibility to define essential health benefits (EHBs), allowing states to ease the ACA's medical-loss ratio (MLR) requirements, and expanding the types of organizations that could serve as navigators to help consumers enroll in exchange coverage. Specifically, the proposed rule would:

    • Allow states to request to lower the MLR threshold insurers must meet if the state can demonstrate that doing so would bolster its individual insurance market;
    • Allow states to select a new benchmark plan for EHBs each year, and would expand states' options for choosing the benchmark plan;
    • Ease requirements regarding so-called navigator organizations that help consumers enroll in exchange plans;
    • Eliminate standardized health plan options;
    • Eliminate the SHOP exchange as an online enrollment tool and instead have small businesses that use SHOP enroll directly through an insurer or a SHOP-registered broker or agent;
    • Exempt student health insurance from rate reviews;
    • Increase the ACA's mandatory premium rate review threshold from 10% to 15%; and
    • Update the ACA's risk-adjustment model.

    The public comment period on the proposed rule closed Monday. CMS on Tuesday released a draft letter for insurers interested in selling federal exchange coverage in 2019 that incorporated changes included in the proposed rule, AHA News reports. The draft letter proposed that insurers submit initial premium rate filings by June 20, 2018, and sign and return final contracts to sell federal exchange plans by late September. The draft letter also proposed starting the open enrollment period for the 2019 coverage year on Nov. 1, 2018.

    Provider groups comment on proposed rule

    The American Hospital Association (AHA) in comments on the proposed rule said it supports some of the changes—including those pertaining to special enrollment periods and minimum essential coverage designations for CHIP buy-in programs—but raised concerns that the proposed benefit changes could inhibit individuals' access to care.

    AHA Executive Vice President Tom Nickels wrote, "While we appreciate CMS' efforts to reduce regulatory burden within the health care system and provide states with increased flexibility, we are concerned that several of the proposals in the rule would reduce patient access to care, including some that could result in health plans that cover fewer benefits and expose patients to greater cost sharing." For instance, Nickels wrote that allowing states to alter EHB requirements could lead to individuals facing "higher out-of-pocket costs for services no longer covered, which also would not be subject to cost-sharing limits or prohibitions on annual or lifetime limits."

    America's Essential Hospitals (AEH) also raised a concern about provider networks, saying CMS should continue to play a role in network adequacy reviews. According to Healthcare Finance News, AEH said relying solely on states for such reviews could result in community providers being left out of plans, impeding patients' access to care.

    The American Medical Association (AMA) in comments said it opposes the proposed rule and "urge[d] CMS not to adopt" the changes. AMA warned that the proposed rule could prompt insurers to scale back health plan benefits, which could increase patients' out-of-pocket costs.  

    Insurers comment on proposed rule

    In comments on the proposed rule, health insurers that sell plans on the individual and small group markets said allowing states to update their benchmark plans each year could create confusion for consumers and make the markets unstable. For instance, Anthem said the proposed rule "may lead states to expand benefits under their benchmark plans without defraying the costs of such benefits, increasing the cost of coverage."

    Centene said allowing states to change the EHBs plans must cover ultimately would be "more of a burden than a benefit to the market."

    Molina Healthcare said the proposed rule would "ope[n] up EHB categories to be influenced by special interest groups and state regulators rather than what is medically necessary."

    Aetna said it largely supports the proposed rule, though it said allowing states to pick a different benchmark plan each year could create instability in the market. Overall, the insurer said, "We appreciate HHS' efforts to expand state flexibility and preserve states' traditional roles of making the best choices for their health insurance markets."

    America's Health Insurance Plans (AHIP) said states should be given the option to change benchmarks every three years, instead of on an annual basis. AHIP said the proposed annual timeframe, coupled with the new selection options, could be burdensome for states to implement. AHIP also said it supports "the proposal to allow states to set different submission deadlines for rate filings," but the organization does not "support public posting of proposed and final rate increases on a rolling basis." AHIP said, "Such a practice could disadvantage issuers who file early and provide an unfair competitive advantage to those who file later."

    Cigna said it opposes CMS' proposal to increase the user fee to support administrative functions of the ACA exchanges from 2% in 2018 to 3.5% in 2019 (Livingston, Modern Healthcare, 11/27; AHA News, 11/27; Morse, Healthcare Finance News, 11/28; AHA News, 11/28).

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