The Centers for Medicare and Medicaid Services (CMS) released its 2022 Notice of Benefit and Payment Parameters (NBPP) on November 25, 2020. With unprecedented speed, the Trump Administration appears poised to release the final rule before it leaves office. This payment rule is intended to outline rule changes CMS plans to adopt that govern the Affordable Care Act (ACA) marketplaces and insurance rules for each plan year. A more detailed summary of the proposed rule can be found in this three part blog series on Health Affairs.
The public was given only 30 days to submit comments on the proposed rule. Given the speed with which CMS has finalized the rule, it is unlikely they took much (if any?) time to review all the comments they received. However, input from affected stakeholders such as insurers, state-based marketplaces, departments of insurance, and consumer advocates is critical for effective policymaking. We therefore reviewed comments from a subset of each of these stakeholder groups, focusing on their reactions to proposed changes in the following areas:
- New “direct enrollment” Marketplaces
- Marketplace user fees
- Codification of 1332 “state innovation” guidance
In the first blog of this series, we summarize the key takeaways and themes from comments submitted by the following insurers and payer associations:
- America’s Health Insurance Plans (AHIP)
- Blue Cross Blue Shield Association (BCBSA)
- CVS Health / Aetna
- Kaiser Permanente
State Exchange Direct Enrollment Options
In what is perhaps the most significant change included in this rule, CMS proposes to allow states to choose an Exchange Direct Enrollment (Exchange DE). This would provide states the opportunity to discontinue use of HealthCare.gov and shift responsibility for determining an individual’s eligibility for Marketplace subsidies and enrolling them in a plan to private sector entities such as insurers, brokers, and agents. This proposal represents a significant change to the way enrollment on the individual marketplace occurs, and is similar to a recently approved Section 1332 waiver for Georgia.
Insurers expressed numerous concerns about adopting this change. Many highlighted the inevitable confusion that consumers would experience when trying to navigate their health plan options. A common theme was the consequences associated with removing the “no wrong door” approach that is currently in place, which helps ensure that consumers enroll in the coverage program for which they are eligible, whether it be Marketplace, Medicaid, or CHIP.
Additionally, a main purpose of the Marketplace is to provide a single, one-stop-shop for all available qualified health plans (QHPs). When the options for enrollment are scattered across different websites or access points, insurers agreed that it makes it harder for consumers to make informed decisions about their enrollment options. Insurers expressed concerns that people would be more likely to choose plans that aren’t best for their health or financial situations. Many highlighted the administrative burden consumers would face if they are required to complete separate eligibility applications on different websites. Consumers will likely not be able to understand the differences in coverage without the ability to directly compare them all in the same place. Insurers also suggested that this would impact people’s ability to meaningfully compare pricing when taking into account financial assistance on different platforms. In Molina’s comments they pointed out that removing this structure could lead those that are eligible for Medicaid to end up paying for a non-ACA compliant plan when they could be getting nearly all their care for free.
While several insurers recommended that CMS refrain from finalizing this element of the proposal, others proposed bringing stakeholders together to consider ways to improve the idea. None endorsed the proposal as is. However, Anthem’s comments were more supportive, noting that enhanced DE provides a seamless enrollment pathway for consumers, before recommending that HHS seek further input from stakeholders before implementing this proposal. Others pointed out that Marketplaces already have the capability of directing consumers to web brokers and EDE websites, but the majority of consumers still choose the shopping and enrollment experience offered on HealthCare.gov. Cigna suggested this would even further complicate options for consumers who use a health reimbursement arrangement.
Kaiser Permanente went as far as to say that this reform would fundamentally destabilize the market, given the central role the Marketplaces play in enrollment and the management of plans. There were also concerns about the Marketplace risk pool and potential adverse selection. Specifically, they noted that DE Exchanges could shift healthier consumers away from the ACA-compliant plans, leading to higher premiums for Marketplace plans.
Molina also argued that the DE Exchanges would elevate the role that market power and brand play in consumers’ decisions among carriers, rather than affordability and value. Large national plans would have an edge because of their name recognition and relationships with brokers, whereas today smaller insurers are on a more equal playing field on HealthCare.gov or the state-based Marketplaces. This could also, they noted, have an impact on premiums as insurers spend more on marketing and associated administrative costs.
Changes to User Fees
The proposal included a reduction to the user fees that insurance carriers are required to pay in order to offer plans on the Marketplaces. This revenue is used to fund the operations of the Marketplaces, which includes outreach and enrollment and the navigator programs. While many insurers acknowledged the benefits of the reduced fees, several issued caution about maintaining sustainable funding for the essential operations of the Marketplaces.
Outreach and enrollment programs have been underfunded in recent years. Since the beginning of the Trump administration, CMS has reduced federal Navigator funding by 84 percent. AHIP strongly encouraged HHS to increase funding for these programs and invest in other ways to promote strong enrollment numbers. BCBSA specifically recommended that if the user fees are finalized at a higher level, then the difference in revenue should be used for outreach and enrollment activities. Cigna pledged that, if the proposal is finalized, they would pass the savings from the reduced user fees onto consumers in the form of lower premiums.
Centene proposed that instead of lowering the fees, the excess revenue could be used to fund a variety of activities including outreach and enrollment, improving operations, or increasing data transparency. The proposal reduces the fee, which is calculated based on a percentage of total monthly premiums, but does not change the way the fee is calculated. Many insurers recommended changing the fee to be based on a dollars per capita basis instead of a percentage of premiums. They argued that premiums are not just a reflection of health care spending but also increased costs associated with updates in regulatory and legal requirements. They recommend CMS look into using a per member per month calculation instead of tying fees to premiums. Others called for more transparency in how this money actually funds the Marketplaces.
Codifying the Trump Administration’s Interpretation of Section 1332 Waivers
Another significant element of the proposed 2022 NBPP was the proposal to codify the Trump administration’s 2018 interpretation of Section 1332 of the ACA. This guidance gave states wider flexibility to waive certain parts of the ACA and relaxed some of the guardrails that states were required to stay within when waivers were considered.
Overall insurers were not supportive of this provision of the proposed rule. Some simply said that there would be future opportunities to evaluate the waiver process without inadvertently approving waivers that increase the cost of coverage. Molina warned that this could essentially bring back to some of the pre-2014 issues that persisted on the individual marketplace that the ACA was intended to address, such as medical underwriting. Kaiser was not supportive of a change that allows the use of federal premium subsidy funds for non-ACA compliant products.
Others objected to the way the administration was making this change. One insurer said that the NBPP was an inappropriate place to propose moving this guidance into federal regulations. Many wanted to have a longer discussion about waiver flexibility under the standard notice and comment rulemaking process. On the whole, insurers were unsupportive of this change for both substantive and procedural reasons.
A Note on Our Methodology
This blog is intended to provide a summary of comments submitted by insurers. This is not intended to be a comprehensive report of all comments on every element in the Notice of Benefit and Payment Parameters proposed rule, nor does it capture every component of the reviewed comments. For more stakeholder comments, visit http://regulations.gov.