Insurers on Affordable Care Act exchanges will have to offer plans with standardized deductibles and limits on out-of-pocket costs and co-pays for each of non-standardized offerings, as well as meet stronger network adequacy requirements in 2023, under a new Centers for Medicare and Medicaid Services final rule issued Thursday.
CMS did not finalize a change to the risk adjustment model for exchange plans that experts had cautioned could prompt insurers to cherrypick healthier consumers, and punted a proposed policy to explicitly prohibit sexual orientation and gender identify discrimination to a future rule.
The policy builds off an Obama-era initiative that was later undone by the Trump CMS. The Biden administration goes a step further by requiring standardized plan offerings where insurers have non-standard options. CMS also says the policy change would support President Joe Biden's 2021 executive order on promoting competition in the economy.
Insurance lobbying group AHIP opposed the policy when proposed in January, saying it could lead to choice overload for consumers. But patient advocates applauded the rule. Standardized plans will make it easier for patients to afford medications, said Carl Schmid, executive director of the HIV+Hepatitis Policy Institute.
"We only wish the Biden administration would have applied these principles to more metal levels and drug tiers, but this provides better options for people who rely on prescription drugs," Schmid said in a statement.
The final rule will require that qualified health plans on the federal marketplace have enough in-network providers within a certain time and distance of enrollees starting in 2023. The following year, insurers will also have to make sure their plan networks meet minimum wait-time standards.
Insurers voiced concern about the network adequacy changes in January. AHIP said CMS should defer to state regulators in states that already use quantitative standards for adequacy reviews. Other insurance groups said such policies wouldn't be feasible during the COVID-19 public health emergency.
CMS tossed its plan to change exchange plans' risk adjustment in a way the agency said would better predict insurers' costs for healthier enrollees. Health policy experts outside the agency cautioned CMS that the policy could make healthier enrollees more attractive to insurers at the expense of sicker people.
CMS did finalize a policy to improve risk adjustment calculations for partial-year enrollees.
CMS also officially clarified that only quality improvement activity expenses directly related to healthcare quality can be included in medical loss ratio reporting. Some insurers had previously been counting expenses like overhead, marketing, lobbying, office space, executives' salaries, company retreats and wall art as incurred claims.
The final rule requires insurers to use clinical evidence to set essential health benefit limitations and coverage requirements. But CMS chose not to finalize a part of the proposed rule that would have overturned a Trump-era policy that removed sexual orientation and gender identity from CMS' non-discrimination regulations.
The Health and Human Services Department is developing a separate proposed rule to address prohibited discrimination in healh coverage based on sex. HHS wants to address the proposed nondiscrimination policies in a future rule to make sure they're consistent with the requirements that will be included in the separate nondiscrimination rule, according to a fact sheet on the rule. The agency said it will continue to enforce prohibit discrimination on the basis of sexual orientation and gender identity in health coverage in advance of future rulemaking.
