ACA exchange rules finalized for 2018 as repeal threat looms

CMS hopes to strengthen the risk pool on Affordable Care Act (ACA)’s insurance marketplace for the 2018 plan year, even as insurers remain uncertain about the exchanges with the incoming Congress and President-elect promising to repeal the law.

The finalized rule and notice of benefits and payment parameters isn’t meant to address that political reality, instead focusing on adjustments to the ACA’s risk adjustment model.

As HHS hinted in August, the model will be changed even as the agency defends the marketplace’s risk pool as “stabilizing.”

“CMS is creating a next generation risk adjustment model that addresses four specific phenomena. The new risk adjustment model will: (1) account for the number of individuals who had a Marketplace plan for less than 12 months; (2) better account for the risk of high-cost patients; (3) improves compensation for healthier members; and (4) use prescription drug data as another way to account for sicker members,” the agency’s press release said.

Partial-year enrollees have been shown to utilize more services than their premiums cover. HHS had already sought to limit abuses of special enrollment periods by requiring some proof of eligibility from customers.

Also included in the risk adjustment update will be a change for the 2019 plan year and beyond. HHS will use data from external data gathering environment (EDGE) servers, the same systems issuers use to submit data for the risk adjustment and reinsurance programs, to recalibrate the risk adjustment models beginning in 2019, with enrollee-level data being masked.

“The improvements announced today build upon years of work to implement a Marketplace that is capable of providing high quality, affordable coverage to all Americans no matter their health status, their income, or where they live” said CMS Acting Administrator Andy Slavitt. “The Administration will leave the Marketplace on a stable path that, when fully implemented, will ensure quality coverage is available for all Americans well into the future.”