Stakeholder Perspectives on CMS’s 2024 Notice of Benefit and Payment Parameters: State Insurance Departments and Marketplaces

By Rachel Schwab

The Biden administration has proposed new rules for the Affordable Care Act’s (ACA) marketplaces in 2024. The annual regulatory package, known as the Notice of Benefit and Payment Parameters (NBPP), is expected to be finalized any day.

To understand the implications of the proposals for the 2024 plan year, CHIR has reviewed a sample of comments from three stakeholder groups. After reviewing comments from insurers and consumer advocates in the first two parts of the series, this third and final blog discusses comments from the following state departments of insurance (DOIs) and state-based marketplaces (SBMs):

A three-part summary of the major proposals in the NBPP from Health Affairs Forefront can be found here, here, and here. This blog will focus on comments regarding a few of the Centers for Medicare & Medicaid’s (CMS) proposals that impact state officials and the consumers they serve.

Auto Re-Enrollment

A majority of Marketplace enrollees are automatically re-enrolled into coverage during the annual open enrollment period, rather than actively selecting a plan. Currently, CMS’s re-enrollment “hierarchy” either keeps individuals in the same qualified health plan (QHP) or, if that QHP is no longer available, into a plan at a similar metal level. Based on concerns about sub-optimal plan selections, CMS has proposed allowing Marketplaces to move bronze enrollees eligible for cost-sharing reduction subsidies (CSRs) into qualifying silver-level plans—with the same or a lower premium and with similar provider networks—so they can take advantage of lower cost sharing. CMS also sought comment on future changes to the re-enrollment “hierarchy,” such as accounting for total out-of-pocket costs and net premiums when moving consumers to new products.

Most states in our sample support the proposed changes to auto re-enrollment policies for 2024. California’s Marketplace, which has an existing policy to move CSR-eligible bronze enrollees into silver-level plans, applauds CMS’s proposal as “creat[ing] more opportunities to connect enrollees to higher value plans.” Similarly, Rhode Island’s Marketplace approves of the proposal to allow auto-renewal of CSR-eligible enrollees into silver plans, noting the importance of guiding enrollees to plans that meet their cost-sharing needs while they have access to enhanced premium subsidies. New Mexico’s Marketplace describes the advantages of auto-enrolling certain consumers into CSR-compatible silver plans, citing benefits for those who face difficulties getting both coverage and care, such as certain minority and immigrant populations. However, several Marketplaces voicing support for the proposal also emphasize the importance of continued SBM flexibility regarding auto re-enrollment.

Some states warn CMS of the potential consequences of proposed auto-renewal policies. Colorado, for example, points out that even a product change that comes with a zero-dollar net premium will carry a financial risk when consumers reconcile their advanced premium subsidies at tax time. Oregon’s DOI and Marketplace suggests that moving certain consumers from bronze to silver will add unnecessary complexity for consumers, enrollment assisters, and insurers, but asks that the policy be expanded to CSR-eligible gold enrollees if finalized. Oregon also expresses concern over the potential future consideration of out-of-pocket costs in auto re-enrollments, describing possible consequences, such as consumers being moved away from plans with generous pre-deductible coverage to Health Savings Account (HSA)-eligible plans that impose a deductible on almost all benefits, or consumers transitioning away from plans with copayments and into plans with more coinsurance.

Reducing Plan Choice Overload

Consumers shopping for health insurance on HealthCare.gov have more options than ever, but too much of a good thing can hinder an individual’s ability to identify the best plan for their health and financial needs. In an effort to simplify the consumer shopping experience, CMS has proposed two potential policies to mitigate the risks of this “choice overload.” One proposal limits the number of non-standard plans an insurer participating on the Federally Facilitated Marketplace (FFM) or SBM using the federal platform (SBM-FP) can offer alongside mandatory standard plan designs to two per metal level and product network type. CMS estimates this cap would reduce average non-standard plan options from nearly 108 products in plan year 2022 to around 37 non-standard products in plan year 2024. The other proposal would require plans on the FFM and SBM-FP within the same “grouping,” by metal level, insurer, county, deductible integration type, and product network type, be “meaningfully different” from one another by having at least a $1,000 difference in deductible. This policy is projected to put less downward pressure on the number of non-standard plans available, reducing the plan year 2022 baseline of roughly 108 non-standard products to 53.2 such products in 2024.

State comments on these proposals vary. Multiple comments suggest that CMS allow more state flexibility if imposing a cap on non-standard plans, particularly in areas where there are not currently an overwhelming number of products available. Alaska’s DOI, for example, highlights that only two insurers participate in the federally facilitated marketplace (FFM) in the state, and that some areas only have one participating issuer, and requests that the state DOI have flexibility to decide when additional plan offerings serve consumer interests. Pennsylvania’s DOI, while insurers in that state’s SBM are not subject to the proposal, indicates the limit on non-standard plans would provide a “helpful template” for SBMs to consider. Oregon’s DOI and Marketplace comment indicates that state officials “adamantly oppose[]” the proposed cap on non-standard plans, and instead asks for improved functionality on HealthCare.gov to simplify consumers’ shopping experience. The meaningful difference standard proposal receives a slightly warmer reception, although two state comments request that the deductible difference be reduced to $500. For its part, the NAIC urges flexibility for states if CMS implements either a non-standard plan limit or a meaningful difference standard, such as letting states “opt out” of the plan limit or permitting a choice of different criteria plans may vary on, such as HSA eligibility.

Network Adequacy

CMS has proposed new standards for the inclusion of essential community providers (ECP) in Marketplace plan networks for Plan Year 2024. These include establishing two additional ECP categories, Mental Health Facilities and Substance Use Disorder Treatment Centers and requiring insurers on the FFM to contract with 35 percent of Federally Qualified Health Centers (FQHC) and Family Planning Providers. The agency also proposes to remove the option for insurers to offer plans without provider networks. The NBPP further signals that CMS will move forward with previously delayed appointment wait time standards.

States have a mixed response to these proposed policies. The Oregon Marketplace and DOI and Pennsylvania’s DOI support the new ECP categories, and Oregon additionally approves of the higher threshold for FQHC and Family Planning Provider contracting. On wait time standards, the NAIC notes concern about how insurers will demonstrate compliance, citing issues with data and regulators’ ability to evaluate the insurer attestations that CMS will rely on for this aspect of network adequacy review. Accordingly, NAIC requests that CMS further develop the policy prior to “robust enforcement.” Pennsylvania’s DOI, however, applauds the wait time standards for the FFM and SBM-FPs, and asks CMS to apply a “minimum floor” across Marketplaces, including SBMs. Meanwhile, the Ohio DOI devotes its entire comment letter to opposing the end of non-network plans on the Marketplaces, asserting it will “stifle innovation.”

Other Issues

States in our sample bring up a number of other issues in their comments. In particular, every Marketplace opposes or has concerns about the proposed improper payment reporting program. Most states also comment on proposed special enrollment period (SEP) changes, generally supporting CMS’s proposals to increase access to mid-year enrollment opportunities and continued flexibility for SBMs regarding whether to implement certain federal marketplace SEP policies. States also provide feedback on the proposal to remove a prohibition on enrollment assisters going door-to-door to reach consumers with a limited ability to travel, with most comments that discuss the policy expressing support. Finally, while most states in our sample do not pay a federal user fee, several comments discuss the proposed changes to the user fee. NAIC approves of the reduced user fee rates. Oregon, which is subject to an SBM-FP user fee, and Colorado, which is not, both request additional transparency regarding user fees and how they are allocated.

A Note on Our Methodology

This blog is intended to provide a summary of comments submitted by SBMs and state DOIs. 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 https://www.regulations.gov/.

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