Thanksgiving came early this year for those who appreciate poring through proposed changes in the annual draft Notice of Benefit and Payment Parameters. Normally published in November, the draft Notice of Benefit and Payment Parameters for 2018 was published on August 29, likely because the Obama administration wants to finalize changes before leaving office in January. Healthcare Dive went through the proposed rule to see which changes would be the most significant, the least likely to work, the most criticized, and the most underappreciated.
Most significant proposal: Risk adjustment replaces reinsurance
The proposals would make significant adjustments to the risk adjustment program. This program redistributes funds from plans with lower-risk enrollees to plans with higher-risk enrollees. However, as it is currently configured, risk adjustment doesn’t account for enrollees with costs that are much higher than average. The reinsurance program provides payments to plans with these types of enrollees, but it is ending this year.
“One of the biggest problems with the current marketplace is that very high cost cases are distorting premiums for everyone,” Timothy Jost, a professor at the Washington and Lee University School of Law, told Healthcare Dive. “The current reinsurance program should be extended and expanded, but in the absence of congressional willingness to do that, using the risk adjustment program to provide reinsurance is a small start.”
The proposed rule would create a pool of high-cost enrollees and adjust transfers to finance 60% of the costs for patients with claims totaling more than $2 million. Payers insuring these high-cost patients would still bear 40% of the costs, so there is an incentive to keep costs low.
Proposal least likely to work: Enhanced enrollment process
There are no proposals that are likely to be ineffective, according to Jost. However, the proposal for an enhanced direct enrollment process could create some confusion.
To enroll in a plan online, consumers currently begin the process on a web-broker or payer website and are then directed to HealthCare.gov for an eligibility application and determination. They are then directed back to the web-broker or payer website to complete the process and enroll in a plan.
The enhanced enrollment process would allow consumers to sign up from start to finish on a web-broker or payer website. After collecting necessary information from a consumer, the web-broker or payer would forward it to HealthCare.gov to make an eligibility determination, which would then be viewable to the consumer on the web-broker or payer website.
While the proposal would require web-brokers and payers to prominently display information regarding advance premium tax credits and cost-sharing reduction payment eligibility, “it could lead to people being enrolled in a plan by an insurer or agent without really understanding all of the options available through the marketplace,” Josh said.
Proposals most likely to draw criticism: Rules on Medicare-eligible patients and risk adjustment
Currently, payers cannot use an enrollees Medicare eligibility to terminate coverage or deny renewals. Patients eligible for Medicare, who are generally older, tend to be costlier and payers have questioned whether they should be required to cover them through ACA exchange plans. However, Medicare-eligible enrollees already on these plans generally prefer their coverage because they tend to pay more than Medicare.
CMS is currently seeking feedback on how to handle Medicare-eligible patients. Specifically, should the requirement for payers to renew plans for Medicare-eligible patients continue? This isn’t necessarily controversial, but it will likely draw some pushback from consumer groups, according to Jost.
Proposed risk adjustment changes are likely to draw some criticism, but this is to be expected. “The risk adjustment formula will always draw protests from issuers that are either benefited by the current program and don’t want it to change or that are disadvantaged by the current program and want it to change more,” Jost said.
Proposal not getting enough attention: SHOP changes
Currently, payers are required, where they have at least a 20% share of the group market, to offer at least one silver and one gold plan through the Small Business Health Options Program (SHOP) in order to offer plans in the individual market on the federally facilitated exchange. In the proposed rule, CMS asks if this requirement should be removed.
Removing this requirement would likely doom SHOP in some states and potentially on the federally facilitated exchange itself, according to Jost. However, CMS is concerned that this requirement is doing more to deter payer participation in the individual market than it is encouraging participation in SHOP so the agency is also considering ending SHOP’s online presence.
At just under 300 pages, the proposed Notice of Benefit and Payment Parameters for 2018 is actually a lot shorter than in years past. However, that doesn’t make the proposed changes any less significant and, while they are just proposals now, a lot is likely to change in 2018.