By Megan Houston and Sabrina Corlette
On January 5, 2022, the Centers for Medicare & Medicaid Services (CMS) released its annual proposed rule governing the Affordable Care Act (ACA) health insurance marketplaces and insurance standards for 2023. Comments on the proposed rule were due by January 27, 2022.
The CHIR team reviewed a selection of stakeholder comments that were submitted in response to the proposed rule. The first post in the series summarized the comments of consumer advocates. In this second installment, we summarize comments submitted by the following health insurers, brokers and web-brokers, and representative associations:
The third and final post will summarize the comments of state insurance departments and state-based marketplaces.
CMS has proposed requiring insurers to meet quantifiable standards for network access. The agency is also proposing to take a more active oversight role. Most of the insurers in our survey urged CMS not to finalize these proposals. They argued that if CMS chooses to implement the new standards, they should delay doing so until plan year 2024. Several noted that the proposed standards would place them at a disadvantage during price negotiations with providers (AHIP, Anthem, BCBSA, CVS Health). They further observed that Medicare Advantage standards are a poor model because of the different provider pricing structures in Medicare and the commercial market. Most of the insurers in our sample agreed with CVS Health that network adequacy oversight should remain primarily a state function: “There is no consumer benefit by adding a federal layer of regulation to an already functioning state regulatory environment.”
CMS has also proposed increasing the threshold percentage of essential community providers (ECPs) that insurers must include in their plans from 20 percent to 35 percent. Here again, insurers objected, arguing that a higher threshold would “increase burdens” on insurers and providers (Cigna) and “drive up prices by increasing negotiating leverage for ECPs” (Molina).
Centene offered a notable exception to the dismay among insurers over CMS’ network adequacy proposals. That company applauds “the direction CMS is headed on network adequacy,” and supports the adoption of quantifiable standards and a higher threshold for ECP participation. Although Centene asked CMS to clarify its policy on a few items, such as the treatment of telehealth services, the company states that the proposed changes “align with Centene’s focus on serving low-income and underserved communities.”
Discrimination Based on Sexual Orientation or Gender Identity
CMS proposes to restore protections prohibiting health insurers from discriminating based on sexual orientation or gender identity. Not all the insurers in our sample commented on this proposal, but those that did (AHIP, BCBSA, Centene, and CVS Health) strongly supported it.
Non-discrimination in Benefit Design: Essential Health Benefits
CMS is proposing to provide insurers with a new framework for non-discriminatory benefit design. Any benefit limitations or coverage requirements would have to be based on “clinical evidence.” CMS is also providing insurers with examples of benefit designs that are “presumptively discriminatory.” Although insurers generally supported evidence-based guidelines, they articulated several concerns. For example, CVS Health, Kaiser Permanente, and AHIP call the proposed framework “overly broad,” and AHIP further argued it would create a “slippery slope” by prohibiting benefit designs that support value-based care and affordable premiums. The association asked that CMS provide insurers with greater clarity on what is permissible by publishing an “exhaustive” list of presumptively discriminatory benefit designs. BCBSA also argued that insurers encouraging use of telehealth “when it is appropriate” should not be considered inherently discriminatory.
Insurers objected to restrictions on their flexibility over the design of drug formularies. Centene for example argued that placing drugs on formulary tiers according to their cost is entirely appropriate, and BCBSA urged CMS to allow each plan’s pharmacy-and-therapeutics (P&T) committee to determine its formulary, noting that P&T committee recommendations are “flexible in the face of constant change in the clinical evidence.” Insurers requested that these proposals be delayed to plan year 2024, if finalized.
Standardized Benefit Design and Reducing “Choice Overload”
CMS is proposing to require insurers to offer standardized plan options, which would be preferentially displayed on HealthCare.gov. They also requested comment on limiting the number of plans insurers can offer at each metal level, and whether the federal marketplace should become an “active purchaser.”
With the exception of Kaiser Permanente, which supports standardized plans, the insurers in our sample panned CMS’ proposals. They would “limit consumer choice,” (AHIP) “reduce the pathways for innovation,” (Anthem) and “increase consumer confusion and administrative complexity” (Cigna). Insurers urged that CMS make it optional to implement standardized plans and refrain from preferentially displaying them.
They recommended CMS to focus instead on requiring that there be a “meaningful difference” between plans, and to improve the user interface on HealthCare.gov. A few would support some limitation on the number of plans insurers can offer at each metal level (CVS Health, Kaiser Permanente, Molina).
New Requirements for Web-Brokers
CMS proposes to require web-brokers to display information for all marketplace plans or a standardized disclaimer that more plan information can be found on HealthCare.gov. Additionally, web-brokers would be prohibited from displaying plans based on their compensation from insurers. The insurers in our sample were generally supportive of these proposals.
Web-brokers requested greater flexibility to comply with the proposed standards. Health Sherpa and eHealth objected to limits on web-brokers’ ability to tailor an enrollment process to the consumer, such as through filters based on consumer preference. eHealth also asked CMS to clarify whether the ban on plan advertisements would also apply to non-Marketplace plans.
Consumer Protections for Broker-Facilitated Enrollments
After recent reports of brokers submitting marketplace applications without consumer consent, CMS is proposing stricter reporting requirements and new guidelines for automated interactions, identity verification, and attestation. AHIP and BCBSA offered strong support for these proposals. NAHU and Health Sherpa were generally supportive but asked CMS to provide more detail on their expectations for compliance. They also observed that if marketplace enrollment becomes too burdensome, brokers will have less incentive to do business in the individual market.
Changes to the Special Enrollment Period Pre-Enrollment Verification Process
CMS proposes to provide consumers with some exceptions to current special enrollment eligibility verification requirements and would give state-based marketplaces flexibility to determine their own verification processes. Insurers expressed concerns that this proposal would destabilize the risk pool. Some insurers further argued that consumers would take advantage of the loosened requirements to fraudulently enroll. However, the insurers acknowledged that administrative burdens hinder enrollment, and suggested that CMS focus on greater automation of the verification process, as well as greater use of data matching tools.
Reversing the Past-Due Premium Policy
CMS has proposed reversing a Trump administration rule allowing insurers to deny coverage to anyone that owes premiums from a previous plan. Only three in our sample referenced this proposal in their comments. BCBSA recommended that CMS apply this only to the individual market, and not in the group market. Molina and NAHU argued that the proposal would incentivize consumers to “game the system” to obtain free coverage.
Updates to Risk Adjustment Methodology
CMS has proposed changing its methodology for risk adjustment, placing greater weight on enrollees that have lower expected medical costs. AHIP acknowledged in their comments that their membership has a variety of views on this proposal. They, along with Kasier Permanente and Anthem, recommended CMS take more time to consider feedback through a white paper process. HCSC and BCBSA argued the proposal creates incentives for insurers to select for risk and offer less generous benefits. In contrast, Molina offered its strong support.
Medical Loss Ratio (MLR) Requirements
CMS has found that insurers are abusing the MLR reporting mechanism by labeling bonus payments to providers as quality improvement activities. Insurers offered a variety of recommendations for CMS’ proposals to establish stricter accounting and reporting guidelines. Several insurers called on CMS to allow value-based contracts to be included under claims spending for MLR reporting. CVS Health argued the proposal “adds more confusion to the MLR regulation.” A number of insurers also highlighted the need to clarify how this would impact spending on social determinants of health programs.
A Note on Our Methodology
This blog is intended to provide a summary of comments submitted by a selection of insurers, brokers and web-brokers, and representative associations. This is not intended to be a comprehensive review of all comments on every provision in the Notice of Benefit and Payment Parameters proposed rule, nor does it capture every component of the reviewed comments. To view more stakeholder comments, please visit https://www.regulations.gov/.
Stay tuned for the third and final post in our series, summarizing comments from state insurance departments and state-based marketplaces.