What You Need to Know About the New Proposed Benefits and Payment Parameters for ACA Marketplace Plans

The U.S. Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) have made proposals to change the benefit and payment parameters for the Affordable Care Act’s (ACA) health insurance marketplace for 2018. 

These proposed changes are an attempt by CMS, which is the driving force behind the marketplace coverage, to update the plan offerings based on comments from the public and issues raised by insurance carriers. It is also meant to encourage more uninsured participants to enroll in marketplace coverage. It is likely that we will continue to see changes to the offerings as time goes on. 

Given the recent departure of two major insurance carriers, Aetna and United Healthcare, from numerous marketplaces, it is in the interests of plan participants and carriers to make improvements to benefits plans in order to strengthen the marketplaces. 

If HHS and CMS’s proposed changes are finalized, they will be effective for plan years that begin on or after January 1, 2018.  Some highlights of the proposed changes include:

Standardized options (simple choice plan)
Although there is currently standardization of the marketplace plans, this proposal includes an increase in standardized options with the intent that at least one standardized option in each level of coverage will comply with state requirements. Also on the table is the creation of a new bronze plan that would act as a high-deductible health plan (HDHP) option. This HDHP would comply with IRS regulations, wherein the participants would be able to contribute to health savings accounts (HSAs).

 This HDHP would be in addition to the current bronze plan, which pays 60 percent of the member costs.  In the newer bronze plan version, the member would have to satisfy the high deductible before any costs for non-preventive services would be paid. However, they would have the opportunity to open an HSA to help offset this cost.

Special enrollment periods
The proposals seek to codify special enrollment periods by adjusting some of the rules, while clarifying other rules.  While codes are already in place, the intent is to help more eligible individuals enroll and prevent abuse by ineligible individuals.

Child age rating
Proposed updates to the child age rating structure would better reflect the health care costs for children. The recommendation is one age band for children up through age 14 and then single-year age bands for ages 15 through 20.

Annual limits on cost-sharing
HHS is proposing a maximum annual limitation on cost-sharing for 2018 in the amount of $7,350 for individual coverage and $14,700 for family coverage.

Prescription drug utilization
Incorporating prescription drug utilization information could improve the predictive ability of cost models. This would be accomplished by reviewing prescription drug purchase data to find those insured individuals who have severe health conditions that are not being reported otherwise, thus allowing carriers to better predict health risks and costs they may incur.

High-cost risk pool
One of the proposals would call for the creation of a high-cost risk pool.  This pool would address those issuers who enroll sicker-than-average enrollees and whose annual healthcare costs exceed $2 million.  The issuers would be allowed to transfer 60 percent of these costs to reduce the impact of these high-utilizers on the plan overall.

For more information, please read the full notice published by CMS. 

This communication is for informational purposes only; it is not legal, tax or accounting advice; and is not an offer to sell, buy or procure insurance.

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