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Web Brokers Might Get to Run Some States' ACA Exchange Enrollment

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Trump administration regulators want to let states use private web brokers to run their Affordable Care Act (ACA) public health insurance exchange enrollment efforts.

Federal agencies have included that idea in a new set of draft regulations.

If the draft regulations are adopted and implemented as written, a state with a state-based ACA exchange could let one or more outside web brokers handle all exchange plan enrollment activities, instead of running its own health insurance shopping website.

A state that took the state-based, web-brokers-only path would still be responsible for deciding whether consumers were eligible for ACA premium tax credit subsidies.

It also would also be responsible for verifying consumer health insurance application information and meeting all of the statutory and regulatory requirements that apply to state-based ACA exchange programs.

Resources

  • A copy of the proposed 2022 Affordable Care Act parameters regulations is available here.
  • An article about the draft ACA parameters for 2020 is available here.

The Centers for Medicare and Medicaid Services (CMS) posted the new draft regulations along with its parent, the U.S. Department of Health and Human Services (HHS), and with the U.S. Treasury Department, last week.

The regulations would set parameters for ACA commercial health insurance rules and programs for 2022 health coverage.

Comments on the draft are due Dec. 30.

ACA Exchange History

Former President Barack Obama signed the main part of the ACA into law March 23, 2010. Some parts of the ACA set underwriting and benefits rules for commercial health insurance.

Another part set up the ACA exchange system, in an effort to promote competition in the private health insurance market by providing state-run, web-based health insurance supermarkets.

HHS ended up setting up HealthCare.gov to provide ACA exchange services in states that are unwilling or unable to provide those services.

Some states, including California, Colorado, Connecticut and New York state, operate their own exchange programs.

Officials at HealthCare.gov and Covered California have said that their exchange programs get about half of their users through agents and brokers.

The Politics

It’s not clear whether President Donald Trump’s contesting of the  the Nov. 3 presidential election outcome will have much bearing on how the ACA exchange program would work in 2022.

When the Trump administration came into office, it kept in place most of the ACA exchange program features and rules it inherited from the Obama administration.

Here are five more things to know about the 2022 draft ACA parameters regulations.

1. User Fees

In states where HealthCare.gov provides all exchange enrollment and account administration services, HealthCare.gov charges participating insurers a user fee of 3% of premiums per signup.

In states where HealthCare.gov works with a state to run the state’s exchange program, HealthCare.gov charges a user fee of 2.5%.

(Related: HealthCare.gov Should Say How It’s Using Insurers’ Cash: AHIP)

Officials have proposed cutting the user fees to 2.25% of premiums in HealthCare.gov states, and to 1.75% in states where the state runs a state-based exchange using federal systems.

2. The Annual Cost-Sharing Limit

The proposed regulations would increase the maximum annual limit on health insurance cost-sharing to $9,100 for individual coverage and to $18,200 for other coverage.

The limits would be 6.4% higher than the 2021 limits of $8,550 for individual coverage and $17,100 for other coverage.

3. Special Enrollment Periods

Officials want to make it clear that individuals qualify for special enrollment periods, or the ability to enroll outside of the usual open enrollment period, when an employer stops paying for their COBRA continuation coverage.

Officials would ease the special enrollment period time limits for individuals who become aware of an event that qualifies them for a special enrollment period late.

Officials also would let exchange plan users who lose access to premium tax credit subsidies to shift to cheaper exchange plans.

4. Report Cards

CMS has started implementing exchange plan enrollee survey requirements.

The new draft regulations call for the full survey results to be publicly available on the web, in downloadable files.

 5. Agents and Brokers

Officials talk about the similarities between HealthCare.gov and agents and brokers in a discussion of how health insurers account for HealthCare.gov user fees.

The ACA minimum medical loss ratio rules require insurers to spend 80% of individual and small-group major medical insurance premiums, and 80% of large-group major medical premiums, on health care and quality improvement  improvement efforts.

Under the current rules, health insurers must treat agent and broker commissions as administrative expenses, not health care expenses, for minimum MLR computation purposes.

Health insurers can, in effect, treat HealthCare.gov user fees as part of their health care expenses, officials say in the preamble, or official introduction, to the regulations.

The current situation “raises important fairness questions regarding the treatment of commissions for agents and brokers in the [medical loss ratio] calculation,” officials write in the preamble. “The user fee combined with the method for calculating the MLR may give the exchange a competitive advantage over agents and brokers.”

Officials have asked for comments on ways to deal with that concern by coming up with new ways to pay for exchange operations.

— Read Stop Giving Dead People ACA Premium Subsidy Estimates: CMS to Exchange Managerson ThinkAdvisor.

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