The Centers for Medicare & Medicaid Services (CMS) released first drafts of its long-awaited annual Exchange guidance on January 17, 2019 – the Proposed Notice of Benefit and Payment Parameters for 2020 (NBPP) and the 2020 Draft Letter to Issuers in the Federally-facilitated Exchanges (Letter) as well as ancillary guidance (the draft Actuarial Calculator and Methodology, the proposed calendar for key certification activities and proposed Rate Review guidance). The guidance was already running behind the typical schedule when its publication was further delayed due to the Federal government shutdown.
As always, the NBPP and Letter set forth changes to rules and operational and technical guidance for health plan regulation, Exchange operations (including plan certification and financial parameters), and premium stabilization programs for the 2020 plan year. CMS’s stated goals with the guidance are:
- Maintaining a stable regulatory environment;
- Reducing regulatory burdens and providing issuers and states with greater flexibility;
- Enhancing the role of states;
- Empowering consumers; and
- Improving affordability.
While last year’s guidance made significant changes and reversed direction on several policies from the prior administration, this year’s guidance proposes to largely stay the course, with the most significant and likely impactful changes proposed being:
- The calculation of the premium adjustment percentage, which would impact the assistance available to individuals seeking eligibility for advance premium tax credits (APTCs) or catastrophic plans based on affordability, as well as the annual cost-sharing limits within Qualified Health Plans (QHPs), including for those eligible for cost-sharing reductions;
- Prescription drug coverage, specifically to promote the use of generic drugs via permitting targeted mid-year formulary changes and allowing issuers to adapt the cost-sharing applied toward the maximum out-of-pocket (MOOP) when a brand is chosen over a generic or a manufacturer coupon is used;
- Risk adjustment, including proposed changes to the risk adjustment data used, adjustments to the methodology, changes to the data validation program and state flexibility request process, and an increase in the user fee, as well as proposing to make data gathered for the program available for other limited uses; and
- Direct Enrollment (DE), including further standardization of the rules that apply across the different kinds of DE entities and strengthening program integrity.
Throughout the preamble, CMS also paid significant attention to increasing transparency. CMS noted in the preamble that it is seeking ways to provide consumers with more information regarding their own health care data. Some of these methods include: increased interoperability of patient-mediated healthcare data across health care programs (including coverage purchased through the Exchanges), as well as the information available about QHPs and the cost of health care services (including greater transparency about cost sharing). One idea included in the proposed NBPP is to require issuers to disclose price information for common coverage and benefit scenarios, much like they do in the Summary of Benefits and Coverage. CMS specifically asked for information about any regulatory barriers to privately-led transparency initiatives.
On the other hand, CMS did not make changes related to Silver plan loading or re-enrollment, as many had expected they would. One of the biggest questions prior to the release of the proposed NBPP was whether CMS would address “Silver loading.” Since the government stopped making payments to issuers to reimburse for cost-sharing reductions (CSRs), many issuers (some under state direction) have concentrated the resulting premium increases on QHPs within the Silver metal level, which are the only plans eligible for CSRs. As a result, the APTCs, which are calculated based on the second-lowest cost Silver plan premiums, have increased. CMS has considered prohibiting Silver loading, but chose not to propose doing so in this year’s NBPP. Instead, in the preamble, CMS stated its hope for a legislative appropriation so CSR payments can resume and requested comments on ways that it could address Silver loading in absence of such an appropriation, while assuring issuers that such a change would not be instituted prior to the 2021 plan year.
Similarly, many were expecting to see changes related to automatic re-enrollment. While CMS also chose not to propose changes to that process at this time, it is seeking comments on re-enrollment policies and program measures that could “reduce eligibility errors and potential government misspending.” CMS noted in the preamble that automatic re-enrollment was used by 1.8 million Federally-facilitated Exchange (FFE) enrollees in 2019, 270,000 of whom have full premium subsidies. This process reduces burdens on both enrollees and issuers and protects against unnecessary losses of coverage. However, CMS noted that their concerns relate to the fact that many of these consumers are choosing not to shop because they are not paying for their coverage. As a result, they may be unaware of coverage changes going into effect in the next plan year and thus, may not update their eligibility information. CMS is considering potential future action related to this issue but, once again, assured issuers that such changes would not go into effect prior to plan year 2021.
Regulators across the country will be reviewing the changes outlined in the proposed guidance to understand how the changes proposed to QHP certification, health insurance regulation, and Exchange operations specifically would impact their regulation of health plans and the markets in their states. Comments on the proposed NBPP for 2020 and the draft 2020 Letter to Issuers are due on February 19, 2019.
In an effort to support states as they analyze the impact of the changes proposed in the NBPP and Letter for 2020, PCG subject matter experts created a summary of notable changes relative to those topics with highlights from other topics that may be of interest.
PCG will also host a webinar on the proposed NBPP and letter on Thursday, February 7th at 2:30pm EST. See below for details.
Review of Proposed 2020 QHP Guidance – Proposed Notice of Benefit and Payment Parameters & Draft Letter to Issuers
Thursday, February 7, 2019
2:30 pm | Eastern Daylight Time (New York, GMT-04:00) | 1 hr
Meeting number (access code): 793 806 488
Meeting password: 2020QHPguidance
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