The Trump administration has come out with a 365-page notice that shows how the U.S. major medical insurance market could look in 2019 — if that market still exists, if the current laws stay about the same, and if the administration tries to keep public health insurance exchange program going.
The Centers for Medicare & Medicaid Services (CMS) maps out the future in a draft set of Affordable Care Act (ACA) benefit and payment parameters for 2019, which is scheduled to appear in the Federal Register on Thursday.
(Related: ACA Definitions: Enrollment Period Basics)
In the draft notice, CMS officials suggest that agents and brokers might:
Offer plans that are a little leaner than the plans available today.
Have an easier time finding policies compatible with health savings accounts, and policies based on value-based insurance design principles.
Face fewer, but tougher, navigators.
Have a little bit easier time collecting commissions.
President Donald Trump and Republicans in Congress are trying to replace the ACA. But CMS officials based the parameters draft on the statutes now in effect. They assume, as a given, that the ACA public exchange programs will exist, that the federal government will continue to pay income-based premium tax credit subsidies, and even that the federal government will continue to make cost-sharing reduction subsidy payments to insurers.
CMS officials say in the introduction to the draft that they hope to shore up the health insurance market by enhancing the role of states, empowering consumers, reducing unnecessary regulatory burden on stakeholders, and improving affordability.
Congress developed the ACA in an effort to help sick people get health coverage as easily as healthy people, to provide new health insurance subsidies, and to create exchanges, or web-based health insurance supermarkets. The ACA drafters wanted the exchanges to give individuals and small employers a quick, easy way to shop for health coverage, and to compare plans on an apples-to-apples basis.
The exchange system opened for business Oct. 1, 2013. The first coverage sold took effect Jan. 1, 2014. The next open enrollment period, for 2018 coverage, is set to start Nov. 1, amidst confusion about how many issuers will offer plans and what the market rules will be.
“Over time, issuer exits and increasing insurance rates have threatened the stability of the individual and small group exchanges in many geographic areas,” CMS officials write in the introduction to the parameters draft.
CMS is an arm of the U.S. Department of Health and Human Services (HHS). President Donald Trump issued an executive order in January that calls for the HHS secretary, and other federal department and agency heads, to reduce ACA-related burdens, CMS officials write.
“In this proposed rule, we are proposing, within the limitations of the current statute, to reduce fiscal and regulatory burdens across different program areas, and to support innovative health insurance models,” officials say.
CMS oversees the ACA exchange programs in all 50 states and the District of Columbia. CMS also runs HealthCare.gov, a system that provides exchange enrollment and account administration services for residents of 39 states. Some of the proposed parameters in the new draft would apply in all jurisdictions. Others would apply only in the HealthCare.gov states.
Here’s a look at seven highlights from the draft that might be of interest to insurance agents and brokers.
1. What’s missing
One of the most important highlights from the new draft is the many topics that CMS leaves out.
In earlier parameters drafts, for example, CMS set strict translation standards for ACA public exchange programs and exchange plan issuers. The agency established elaborate rules for handling agents accused of wrongdoing, and it tinkered with the open enrollment period starting dates and ending dates.
In the new parameters draft, CMS ignores most of the parameters it has already established. It looks, for example, as if the open enrollment period for 2019 could start Nov. 1, 2018, and end Dec. 15, 2018.
2. Agents and broker auditors
HealthCare.gov managers have tried to attract agents and brokers by establishing a direct enrollment program that will let HealthCare.gov agents’ sell HealthCare.gov plans, with premium subsidies, through their own websites, without having to pass the clients over to HealthCare.gov. For 2018, agents and brokers participating in that program are supposed to get themselves audited by HHS-approved auditors.
In the new parameters draft, CMS proposes letting agents and brokers choose any auditor that appears to meet HHS requirements. Would-be auditors that have experience in areas such as health data security compliance may be able to provide the audits without getting approved by HHS. The auditors’ employees would still have to go through annual HHS training programs.
Navigators are supposed to help consumers understand the ACA exchange system but are not actually supposed to recommend specific plans.
Some agents and brokers have developed good relationships with local navigators. Other producers resent navigators and believe that navigators perform functions that should be performed only by licensed agents or brokers who have gone through a state insurance license screening and testing process and have proper errors and omissions insurance.
Navigators, for their part, have faced headaches of their own: They got into the exchange business to be helpful, low-key guides, but, now, exchange program managers want them to send in large numbers of applications. HealthCare.gov managers they have tied grants for the 2018 navigators to the navigators’ 2017 application activity levels.
CMS has required each state exchange to have at least two navigators, with one being a community- and consumer-focused nonprofit group. CMS has also required a navigator to have a physical presence in the markets it serves.
In the new parameters draft, CMS says that, starting in 2019, it may require an exchange to have just one navigator, and that it might eliminate the requirement that a navigator have a physical presence in each market it serves.
An exchange could still have two or more navigators, and it could still require navigators to have a physical presence in the markets served, but that would be up to the exchange managers, officials say.
A navigator would still have to be able to provide face-to-face help for consumers, but it could, for example, provide that face-to-face help through alliances with other organizations, officials say.
4. Essential health benefits
CMS now requires most exchange plans to cover at least about 60% of the actuarial value of a standard health benefits package, or “essential health benefits package.”
The EHB package includes 10 standard types of benefits, such as hospital care benefits, physician care benefits and prescription drug benefits.
CMS originally required each state to base its EHB package on the kinds of benefits a state employee health plan or comparable plan might provide.
Starting in 2019, CMS might let states choose to tweak their EHB packages.
A state could adopt an entire EHB package that was already in use in 2017 in another state, or it could replace some of its EHB package components with benchmark options in use in other states. One state, for example, could keep most of its EHB package standards in place but replace the prescription drug benchmark with another state’s prescription drug benefits standard.
A state could redesign its EHB benchmark plan. If a state designed its own EHB benchmark plan, the plan must:
“Not have benefits unduly weighted towards” any of the 10 categories of benefits in the EHB package.
Be equal in scope to the benefits provided under a “typical employer plan.” (A typical employer plan could be an insured or self-insured group health plan with a total of at least 5,000 enrollees in one or more states.)
“Provide benefits for diverse segments of the population, including women, children, persons with disabilities and other groups.”
Go through a public notice and public comment period. (States would determine what constituted a reasonable public notice and public comment process.)
CMS now requires health insurers to justify rate increases over 10%.
CMS has proposed increasing the justification cut-off to 15%.
CMS has also proposed easing the rules for an existing ACA provision that, in theory, could let a state lower its minimum medical loss ratio (MLR) level, or ratio of health plan claims to plan revenue, to stabilize its market.
Up till now, no state has tried to change its minimum MLR levels.
One possible reason to approve a state’s MLR change request might be if the change could, possibly, improve consumers’ access to agents and brokers, officials write.
6. Plan types
In the past, HealthCare.gov managers tried to improve consumers’ ability to shop for coverage on a true apples-to-apples basis by developing cookie-cutter “standardized option” plan templates, and having the standardized option plans come up at the top in HealthCare.gov search results.
HealthCare.gov also tried to protect consumers against having too many confusing choices by requiring any new plans added to HealthCare.gov to be “meaningfully different” from the plans already available.
CMS officials write in the parameters draft that what HealthCare.gov needs now is more plans and more issuers. Officials have proposed making HealthCare.gov more flexible by getting rid of any standardized option requirements or special treatment, and by getting rid of the meaningful difference rules.
Officials say they would like comments about how they can add products that incorporate value-based insurance design principles, or richer benefits for care that may do more to improve people’s health and reduce claims costs, and about how they can make it easier for exchange plan issuers to offer policies that are compatible with the health savings account program.
7. State-based exchange programs
HealthCare.gov provides enrollment and account administration services for five states with state-based exchanges.
HealthCare.gov charges issuers a 3.5% user fee in states that rely fully on HealthCare.gov.
Last year, under former President Barack Obama, CMS proposed charging issuers in states with state-based exchanges that use HealthCare.gov a user fee of 3%. States complained that HealthCare.gov user fee rate was too high, and CMS reduced the user fee rate to 2% for 2017.
Now, CMS is trying to get the HealthCare.gov user fee for those states up to 3% for 2019.
CMS says that, in future, it also hopes to make HealthCare.gov a better business partner.
Right now, because of technical limitations, HealthCare.gov has a hard time letting states choose what services they want, or getting states detailed activity data, officials say.
In the future, officials say, they want to give the state-based exchange programs that use HealthCare.gov more data and more flexibility.
— Read Obama Administration Adjusts ACA Exchange Program for 2018 on ThinkAdvisor.