CMS Uses Regulatory Levers to Chip Away at Affordable Care Act Protections

On Monday, the Centers for Medicare and Medicaid Services (“CMS”) released (1) the Notice of Benefit and Payment Parameters for 2019 final rule (“Final Rule”), (2) the Final Annual Issuer Letter and (3) guidance on hardship exemptions and transitional policies. Some of the more significant developments contained in the documents released by CMS are as follows:

1. Additional Options for “Benchmark” Plans:Under the Final Rule, for 2020 plan years and beyond, states will be able to select their Essential Health Benefit (“EHB”) benchmark plan from one of the 50 EHB-benchmark plans that other states used for the 2017 plan year. Alternatively, states will have the option of crafting a custom set of benefits to become its EHB-benchmark plan. This development will greatly expand the number of options states have to choose from when selecting their EHB-benchmark plans.
2. New Hardship Exemptions: CMS issued new guidance expanding hardship exemptions that will apply to HealthCare.gov, which is the marketplace in the majority of states.Pursuant to that guidance, individuals who live in counties with one or no issuers will qualify for a hardship exemption from paying the Affordable Care Act’s penalty for not having coverage. Persons who need specialty care not offered through affordable ACA plans may also qualify for a hardship exemption. The guidance further allows CMS to consider a broad range of factors that mayresult in consumers needing hardship exemptions.
3. MLR Calculation Modifications: The Final Rule provides that a state may request an adjustment of the individual market medical loss ratio (“MLR”) if the state can demonstrate that a lower MLR could help stabilize the individual market in the state.