- CMS has issued a final rule that relaxes certain Affordable Care Act health plan regulations in an effort to drive competition and affordability within state health insurance markets.
The agency said that the new rule will give payers more flexibility and control to offer a greater variety of ACA-compliant plans by customizing which essential health benefits (EHBs) are offered.
The final rule will also provide states the authority to review Qualified Health Plan (QHPs) standards. This task was previously the responsibility of the federal government.
CMS stated that the new rule follows other federal efforts to provide affordable health insurance options. The efforts include a proposed rule from the Department of Labor to expand the sale of association health plans and the Market Stabilization Rule passed in 2017.
CMS Administrator Seema Verma believes that the new rule will create a stable ACA health plan market that lowers premiums for consumers and provides a greater variety of health insurance options.
“Too many Americans are facing skyrocketing premiums that they can’t afford and every year consumers are faced with the threat of fewer choices,” Verma said in a press release “This rule gives states new tools to stabilize their health insurance markets and empower citizens to find coverage that fits their families’ needs and budgets.”
The rule does not change the mandatory 10 EHBs required by law but allows states to choose from a greater variety of EHB-benchmark plans.
States can choose from 50 types of EHB health plan choices to set as the benchmark plan. States can also select specific EHB categories such as drug coverage or hospitalization benefits to add or switch within their benchmark plan offerings.
“States will also now be able to build their own set of benefits that could potentially become their EHB-benchmark plan, subject to certain scope of benefits requirements,” the agency said.
States will now be responsible for reviewing network adequacy requirements for QHPs, according to the new rule.
The rule eliminates meaningful difference requirements for insurers that offer QHPs. The meaningful difference requirements were intended to inform consumers about differences in health plans.
CMS argues that meaningful difference standards are not effective for providing more health plan options for consumers. The agency believes removing these requirements will create more health plan options for consumers because eliminating meaningful difference regulations may provide payers the flexibility to innovate health plan design.
“In addition, CMS is eliminating requirements for State-Based Exchanges using the Federal Platform (SBE-FPs) to enforce federally-facilitated exchange standards for network adequacy and essential community providers,” CMS said.
“Instead, CMS is allowing SBE-FPs the flexibility to establish their own standards, which CMS believes will further empower SBE-FPs to use their QHP certification authority to encourage issuers to stay in the exchange, enter the exchange for the first time, or expand into additional service areas.”
The rule adds stricter review processes for individuals that try to qualify for advanced premium tax credits (APTCs) that subsidize ACA health plans.
CMS will use IRS and Social Security data to check income inconsistencies when a customer’s earned and listed income is substantially different.
The agency will focus income checks on members who earn below 100 percent of the federal poverty line (FLP) to ensure that health plan members aren’t fraudulently receiving APTCs.
“To further promote program integrity, CMS is removing the requirement prohibiting exchanges from discontinuing APTC because the tax filer has failed to file a tax return and reconcile APTC paid for past benefit years, if the exchange does not first send notice directly to the tax filer,” CMS said.
The final rule also adds several changes to give states flexibility in reviewing insurance premium rates.
The new changes will exempt student health insurance from rate reviews and increases the threshold required for review of other health plans. Health plans will only be subject to a rate review when they increase premiums by 15 percent, instead of the previous 10 percent increase threshold.
The agency provided a final issuer letter for payers that want to offer QHPs for plan year 2019. The letter provides detailed bulletins for payers about to the final rule’s flexible ACA health plan options and additional changes.