5 things to know about the final ACA marketplace rule for 2018

CMS has issued its final rule aimed at stabilizing the Affordable Care Act (ACA) health insurance exchanges, checking many items off insurers’ wish lists while leaving the most pressing issue—whether cost-sharing reduction subsidies will be funded—unsettled as insurers decided whether to participate in the individual market next year.

The final rule is largely unchanged from the version proposed in February, which had been followed by an unusually short 20-day comment period.

“CMS is committed to ensuring access to high quality affordable healthcare for all Americans and these actions are necessary to increase patient choices and to lower premiums,” CMS Administrator Seema Verma said in a press release. “While these steps will help stabilize the individual and small group markets, they are not a long-term cure for the problems that the Affordable Care Act has created in our healthcare system.”

Among the notable changes (and omissions) in the final rule:

1. Shorter open enrollment period

The last several open enrollment periods allowed marketplace customers to sign up for coverage from Nov. 1 through Jan. 31. Next time around, they’ll have only half that time, as the rule ends open enrollment on Dec. 15—what had previously been the cut-off date to buy coverage which would begin in the new year. CMS said this aligns ACA enrollment more closely with Medicare and most employer-sponsored plans.

2. More restrictions on special enrollment periods and not paying premiums

Following up on a proposal from the Obama administration, customers who want to buy coverage outside open enrollment have to prove they’ve experienced a qualifying life event, such as losing their employer-sponsored coverage or moving. Special enrollment period customers have been shown to have higher utilization, indicating some people are only buying coverage when they know they’ll need services.

Additionally, customers won’t be able to renew coverage in open enrollment when they have outstanding premiums from the previous year, which CMS said would have a “positive impact on the risk pool by removing economic incentives individuals may have had to pay premiums only when they were in need of healthcare services.” The final rule declined to set up any review process at the federal level for individuals unable to pay their monthly premiums due to financial hardships, leaving those decisions up to individual states.

3. Changing actuarial value standards

This provision will allow insurers to cover a lower amount of costs while maintaining certain “metal levels” in the ACA. For example, silver-level plans had to cover 68 to 72 percent of costs. The new rule adjusts that range downward, allowing insurers to cover as little as 66 percent of costs in the silver plans “to help issuers design new plans for future plan years, thereby promoting competition in the market.”

The skimpier coverage could have broader consequences, however, since the tax credits customers receive are based on those silver-level plans.

4. Who decides network adequacy

Under the rule, any question of whether an insurer’s network provides a “reasonable access standard” will be determined by the states, regardless of whether they use the federally facilitated marketplace or their own. CMS said states are more often better suited for this regulatory task.

“We do not believe relying on state reviews in states that have the authority and means to conduct sufficient network adequacy reviews will translate to decreased access to providers,” the rule said.

5. What’s left out  

Insurers appear to be happy with the changes, but America’s Health Insurance Plans (AHIP) President and CEO Marilyn Tavenner was quick to point out the rule doesn’t address the ACA’s cost-sharing subsidies, which President Donald Trump has threatened to withhold in order to gain Democrats’ support for a repeal-and-replace plan.

“Without funding, millions of Americans who buy their own plan will be harmed. Many plans will likely drop out of the market. Premiums will go up sharply—nearly 20 percent—across the market. Costs will go up for taxpayers. And doctors and hospitals will see even greater strains on their ability to care for people,” Tavenner said.