Background:
The U.S. Department of Health and Human Services (HHS) released its annual Notice of Benefit and Payment Parameters for 2020’s proposed rule earlier this month. According to the Center for Medicare and Medicaid Services (CMS), the annual notice updates guidance and regulations related to issuers and Exchanges.
This year’s notice would be generally effective for plan years beginning on or after January 1, 2020. The comment period is open until 5 p.m. on February 19, 2019. The notice is largely in the spirit of streamlining requirements and providing greater flexibility to states and issuers in order to facilitate a more efficient and competitive market.
According to CMS, the following are the major proposals regarding Exchanges and Qualified Health Plans (QHPs):
- Direct Enrollment: For 2019, CMS is implementing an enhanced direct enrollment pathway to allow partners to host the eligibility application and enrollment service for QHP applicants without redirecting to Healthcare.gov. CMS has also proposed streamlining and updating direct enrollment requirements for clarity and innovation.
- Navigator Program: To provide more flexibility for navigators operating in Federally-facilitated exchanges (FFEs), CMS has proposed streamlining existing training topics into four broad categories and making post-enrollment duties permissible, not required.
- Prescription Drug Benefits: To reduce prescription drug expenditures, HHS is incentivizing use of lower-cost drugs. The three proposals include: allowing issuers to adopt mid-year formulary changes to encourage use of lower-cost generic drugs; allowing issuers to exclude certain cost sharing toward the annual limitation on cost sharing if a consumer selects a brand drug over a generic drug; and allowing issuers to exclude drug manufacturer coupons from counting toward the annual limitation on cost sharing when a generic is available.
- Segregation of Funds for Abortion Services: To ensure that potential enrollees are not discouraged from enrolling, a QHP issuer that provides coverage of non-Hyde abortion services must provide at least one “mirror QHP” omitting abortion services in the same service area(s).
According to CMS, the following are the major proposals regarding payment parameter provisions:
- Exchange User Fee Rates: Proposal to decrease the user fee rate from 3.5% to 3.0% for issuers on FFEs for the 2020 benefit year. Proposal to decrease the rate from 3.0% to 2.5% for issuers on the State-based Exchanges on the Federal Platform (SBE-FPs).
- Risk Adjustment Data Validation (RADV) Audits and Sample Size: HHS considers several approaches for incorporating prescription drugs into risk adjustment validation processes. HHS codifies the materiality threshold at $15 million and for issuers under 500 billable member months. Proposal for exemption from audit for issuers in liquidation or entering liquidation. Guidance on how to apply issuer risk score error rates when issuers leave a market or when an issuer joins a previously single-issuer market. Proposals on varying the initial validation audit sample sizes; HHS seeks comment.
- Premium Adjustment Percentage: HHS proposes a premium adjustment percentage of 1.2969721275, an increase in private individual and group market health insurance premiums of approximately 29.7% over the period from 2013 to 2019.
- Maximum Annual Limitation on Cost Sharing: HHS proposes a maximum annual limitation on cost sharing of $8,200 for self-only coverage and $16,400 for other than self-only coverage for the 2020 benefit year. This is a 3.8% increase above 2019 parameters.
- Reduced Maximum Annual Limitation on Cost Sharing: HHS proposes that the 2020 reduced maximum annual limitation on cost sharing be $2,700 for self-only coverage and $5,400 for other coverage for individuals with incomes between 100-200% of the federal poverty level, and $6,500 for self-only coverage and $13,100 for other coverage for individuals with incomes between 200-250% of the federal poverty level.
- Required Contribution Percentage: In an increase of .09 percentage points from 2019, HHS proposes a required contribution percentage for 2020 of 8.39%.
According to CMS, the following are the major proposals regarding eligibility and enrollment provisions:
- Special enrollment period (SEP): Considering no SEP exists for individuals who are enrolled in off-exchange market coverage, HHS proposes to create an optional SEP for off-Exchange enrollees who experience a decrease in household income and are newly determined to be eligible for advanced premium tax credits.
- Exemptions: Proposal to allow individuals to claim hardship exemptions through the taxi filing process without being required to obtain an exemption certificate number.
Of all the proposals, the addition of an optional SEP and the increased user fee rates could have great impact on issuers and exchanges. After the comment period closes on February 19, HHS will review comments. If the agency receives significant comments, it may revise the proposals and must again propose the rule. If not, the agency will implement the minor feedback into the final rule.
Sources:
- https://www.federalregister.gov/documents/2018/04/17/2018-07355/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2019
- https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/Proposed-2020-HHS-Fact-Sheet.PDF
- https://www.thebalancecareers.com/steps-in-the-federal-rulemaking-process-1669507
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