CMS issues policies aimed at ensuring ACA plan subsidies are offered to 'the right people'

Affordable Care Act
CMS has released its annual proposed rule governing the ACA exchanges. (Getty/zimmytws)

The Trump administration has unveiled several policy proposals for the Affordable Care Act exchanges that it says will ensure premium tax credits are going to “the right people."

The Centers for Medicare & Medicaid Services issued its annual proposed Notice of Benefit and Payment Parameters rule (PDF) on Friday. In it, the agency proposed updates to data matching standards to prevent tax credits from being paid to enrollees who have died or are dually eligible for Medicare benefits, CMS officials said.

CMS has also proposed a new approach to automatic re-enrollment for members with $0 premiums after tax credits. To ensure that these enrollees are receiving tax credits appropriately, the agency wants to require that they return to the exchange to update their application during open enrollment. 

If a member fails to do this, their tax credits could be canceled or reduced for the coming plan year, CMS said. The agency is seeking stakeholder feedback on this plan. 

"We remain concerned that automatic re-enrollment may lead to incorrect expenditures of [the tax credits], some of which cannot be recovered through the reconciliation process due to statutory caps," CMS said in the rule. "We believe that there may be particular risk associated with enrollees who are automatically re-enrolled with APTC that cover the entire plan premium, since such enrollees do not need to make payments to continue coverage."

In addition, the agency would require states to annually report any benefits they require beyond the ACA’s mandated essential health benefits. CMS said there’s limited data gathered on these requirements and who’s defraying the costs. 

RELATED: Urban Institute—Premiums for cheapest ACA silver plan fell across 31 states in 2020 

Here’s a look at some additional provisions in the NBPP: 

  • CMS intended as part of its rulemaking for the 2020 exchanges to block plans from applying drugmaker coupons for a branded product to a member's deductible or other cost-sharing if there's a generic available. That proposal is back.

The goal was to push greater use of generics. The idea was put on ice last summer amid confusion from the industry on how the policy worked. Industry groups said the rule was unclear on if the coupons would be applicable to member’s out-of-pocket costs in other situations and expressed concern that it would conflict with regulations on high-deductible health plans. 

So, as part of its rulemaking for the 2021 exchanges, CMS said that exchange insurers can choose to apply—or not apply—these coupons toward a member’s out-of-pocket limits, regardless of if there is a generic available. 

“We encourage issuers and group health plans to consider utilizing this proposed flexibility to find innovative methods to address the market distortion that occurs when consumers select a higher-cost brand name drug when an equally effective, medically appropriate generic drug is available,” CMS said in the rule. 

Copay accumulators are controversial among patient advocates and have been banned in some states, including West Virginia and Virginia. They’re a growing tool for plan sponsors in the ACA market and employer-sponsored market to shift additional costs to consumers. 

RELATED: Payers, providers to CMS—Don't end silver loading 

  • CMS has proposed maintaining the current user fee for Healthcare.gov, which is 3% of premium costs. The user fee for state-based exchange is set for 2.5% of premium costs. 

The agency is also seeking comment from stakeholders on potentially lowering the fees based on lower cost projections and enrollment for 2021. Lowering the fee, CMS said, would further its goal of lowering ACA premiums for the third straight year. 

“[President Donald Trump’s] bold measures to promote competition on the individual market have delivered consumers a previously unheard of two consecutive years of lower premiums and increased choice for health plans,” CMS Administrator Seema Verma said in a statement. 

“That said, premiums are still too high for those without subsidies, and we are dedicated to bringing them down,” Verma said. 

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