- CMS on Monday issued a final rule giving states flexibility in selecting essential health benefits under the Affordable Care Act. States can build their own set of benefits to be used as a benchmark plan for EHBs, subject to new requirements.
- The rule allows states to loosen the current regulations on the medical loss ratio, which requires payers spend at least 80% of premium income on healthcare and quality improvement.
- In addition, CMS issued new guidance to expand ACA's hardship exemptions to including people who live in counties with no or only one insurer offering plans.
The sweeping rule is the latest in the Trump administration’s steady chipping away at the landmark health law, which has been coupled with a move to give states more control over their healthcare regulations.
The administration cut off cost-sharing reduction payments to insurers in October, sparking backlash from payers. The Republican tax bill last year repealed the individual mandate penalty starting in 2019.
And more is on the way. In February, the administration released a proposed rule to expand short-term health insurance availability, bumping up the allowance of coverage to 12 months.
It is also promoting association health plans, which aren't required to meet the EHB requirements or protect people with pre-existing conditions. The ACA requires payers to cover at least 10 specific benefits, including maternity care and prescription drugs.
The rule includes a number of other changes, including the requirements for insurers planning premium increases. Those rate hikes must now be submitted for regulatory review if they are 15% or more, instead of the current trigger of 10%.
Also, the agency is eliminating online enrollment requirements for the Small Business Health Options Program and allowing employers to directly enroll through brokers.
Out-of-pocket maximums are adjusted to $7,900 for individuals and $15,800 for families.
“Given the repeal of the individual mandate and other recent market changes, this year’s final NBPP provides additional insight into what we can expect in 2019,” said Kelly Brantley, vice president at Avalere. “Going forward, we expect that the administration will continue to focus on granting flexibilities involving essential health benefits, exchange requirements, and benefit design.”
The new EHB flexibility could mean less generous benefits and worsened access to care, Avalere said. Policy experts argue that the rollback, along with eliminating the mandate penalty, is likely to fragment the risk pool and drive up premiums.
Meanwhile, the administration has approved Medicaid waivers that also scuttle EHBs and other ACA rules. CMS recently approved work requirements for beneficiaries in Kentucky and Arkansas, one of the most conservative policies put forward. It did, however, deny Idaho’s bid to sell non-compliant plans, arguing it did not enforce what is still the law of the land.
Also Monday, the Congressional Budget Office released a report showing the federal government will spend about $757 billion on ACA premium subsidies over the next 10 years. The increased premium rates from the decision to cut off CSRs are more than offset by the decrease in ACA plan enrollees expected with the elimination of the individual mandate penalty.