In a final rule released today, for 2022, the Centers for Medicare and Medicaid Services will reduce the user fee for qualified health plans sold through a federally-facilitated exchange from 3% to 2.25% of premium. CMS
This is an additional reduction beyond the 0.5 percentage point reduction in the user fee rate included in the 2020 payment notice.
CMS also is finalizing a reduction in the user fee for issuers offering plans through state-based exchanges that use the federal platform from 2.25% to 1.75% of premium. In years past, including 2020 and 2021, this provision has been key to reducing insurance premiums to deliver an 8% average premium reduction across states with exchanges using HealthCare.gov since the 2018 coverage year.
CMS expects to continue reviewing comments and finalizing other proposed policies in a second final rule to be published at a later date.
Working to address comments and feedback from the public after publishing the proposed 2022 payment notice in November, CMS is using the first final rule to tackle a number of critical priorities for the agency, including reducing consumer costs, empowering states to develop their own unique plans, accelerating innovation and clarifying program requirements.
WHAT’S THE IMPACT
The provisions in the final rule for the annual Notice of Benefit and Payment Parameters for 2022 (the 2022 payment notice) is an effort to make the insurance marketplace more affordable, CMS said.
These reductions reflect what CMS considers successful cost-saving measures implemented over the past several years to strengthen program integrity and improve technological infrastructure.
Another goal of the final rule is to promote flexibility for states to develop their own healthcare programs to meet region-specific needs. Implemented through 1332 waivers, the update creates an opportunity for states to waive certain statutory requirements to create health programs tailored to their own citizens, subject to federal approval. The final rule codifies, in regulatory text, guidance published in 2018 that gives states greater certainty over how the federal government will evaluate and monitor section 1332 waivers moving forward.
The rule, said CMS, contains new options for states to develop next generation exchanges that leverage web-brokers and insurance issuers for the direct purchase of QHPs. This approach would rely on web-brokers and issuers to serve as the primary consumer-facing means to apply for and enroll in individual market QHPs through the exchange.
Under these options, exchanges would retain responsibility for ensuring that participating web brokers and insurers meet all applicable consumer protections, as well as remain responsible for making all eligibility determinations, performing required verifications of consumer application information, and meeting all statutory and regulatory requirements for operating an exchange.
Also included, according to CMS, are protective provisions for consumers covered through certain health reimbursement arrangements (HRAs). HRAs are an alternative to “traditional” group health plans that allow employers to provide defined pre-tax reimbursements to employees for qualified medical expenses, including monthly premiums.
In response to questions and confusion regarding policy, the 2022 payment notice clarifies that issuers of individual market QHPs must accept premium payments made by or on behalf of an enrollee in connection with an individual coverage health reimbursement arrangement (individual coverage HRA) or qualified small employer health reimbursement arrangement (QSEHRA).
Finally, the agency said there is now greater clarity on building plans that lack a traditional provider network. Some insurance plans don’t use a provider network, meaning they don’t vary benefits based on whether enrollees receive services from an in-network or out-of-network provider.
In an attempt to address lingering confusion regarding regulatory requirements that might limit plan innovations, the 2022 payment notice clarifies that, to have such plans certified as QHPs, issuers of these plans need not pursue compliance with network adequacy requirements applicable to QHPs, since their benefits do not vary based on a provider’s network status.
THE LARGER TREND
Historically, these rules are released in the fall but since 2018, CMS has issued them around January. The rule becomes final less than a week before President-elect Joe Biden is inaugurated on January 20, 2021.
ON THE RECORD
“Since 2017, premiums are down, coverage options are up, and we have stabilized the individual market with better care at lower costs,” said CMS Administrator Seema Verma. “The actions we’re taking today ensure these improvements can continue tomorrow, because we must never be satisfied when too many Americans still cannot afford coverage in the individual market.”