The Centers for Medicare & Medicaid Services (CMS) Thursday issued a rule that finalizes several of the proposed provisions for the annual Notice of Benefit and Payment Parameters for 2022 (the 2022 payment notice). The rule makes changes to reduce consumer costs in the Affordable Care Act (ACA) marketplace, empowers states to develop their own health care program, accelerates innovation, and clarifies program requirements.
The agency said in an announcement it will continue to review comments and finalize other proposed policies in a second final rule, but it’s unclear when it will be published or if it will be published at all under the incoming Biden administration. Those proposals include technical changes to the risk adjustment program in the ACA marketplace for the 2022 benefit year.
Thursday’s final rule, which takes effect on March 15, aims to address priorities for the agency to make the individual market more affordable. Those priorities include:
Lower premiums: For 2022, CMS will reduce the user fee for qualified health plans (QHPs) sold through a federally-facilitated exchange (FFE) from 3.0 percent to 2.25 percent of premium. This is an additional reduction beyond the 0.5 percentage point reduction in the user fee rate included in the 2020 payment notice. CMS also reduced the user fee for issuers offering plans through state-based exchanges that use the federal platform (SBE-FPs) from 2.25 percent to 1.75 percent of premium.
Flexibility to help states develop their own health care programs that meet unique local needs: Implemented through 1332 waivers, this change will allow states to waive certain statutory requirements to create health programs tailored to their own citizens, subject to federal approval. The final rule codifies in regulatory text guidance published in 2018 to give states greater certainty over how the federal government will evaluate and monitor section 1332 waivers moving forward.
New options for states to develop next generation exchanges that leverage web-brokers and insurance issuers for the direct purchase of QHPs: This approach would rely on web-brokers and issuers to enroll consumers in the individual market QHPs through the exchange. Under these options, exchanges are responsible for ensuring that participating web brokers and insurers meet all applicable consumer protections. Exchanges also remain responsible for making all eligibility determinations, performing required verifications of consumer application information, and meeting all statutory and regulatory requirements for operating an exchange.
Protective provisions for consumers covered through certain health reimbursement arrangements (HRAs): HRAs are an alternative to “traditional” group health plans that allow employers to provide defined pre-tax reimbursements to employees for qualified medical expenses, including monthly premiums. In response to questions and confusion regarding policy, the 2022 payment notice clarifies that issuers of individual market QHPs must accept premium payments made by or on behalf of an enrollee in connection with an individual coverage health reimbursement arrangement (individual coverage HRA) or qualified small employer health reimbursement arrangement (QSEHRA).
Greater clarity on building plans that lack a traditional provider network: Some insurance plans do not use a provider network, which means they do not vary benefits based on whether enrollees receive services from an “in-network” or “out-of-network” provider. To address confusion regarding regulatory requirements that might limit plan innovations, the 2022 payment notice clarifies that to have such plans certified as QHPs, issuers of these plans need not pursue compliance with network adequacy requirements applicable to QHPs, since their benefits do not vary based on a provider’s network status.
In a Health Affairs blog post, Katie Keith notes that because the final rule doesn't take effect until March 15, it's possible that the Biden administration will put a freeze on it, postponing the effective date. If so, CMS would need to formally withdraw or amend this final rule. Another option, she wrote, is that CMS could give notice that it intends to reconsider the policies outlined in the new final rule.