CMS seeking feedback on ways to address ACA exchange ‘silver loading’

ACA
CMS has released it Notice of Benefit and Payment Parameters for the 2020 plan year. (Getty/designer491)

CMS has unveiled a slew of policy tweaks aimed at the individual, small group and large group insurance markets, including a request for feedback on how it should handle “silver loading.”

The Centers for Medicare & Medicaid Services released (PDF) its proposed Notice of Benefit and Payment Parameters (NBPP) for the 2020 plan year, and in it the agency outlines the regulatory guidelines for qualified health plans offered on the Affordable Care Act’s exchanges.

In the rule, CMS said it is seeking additional comment on the best way to address so-called silver loading and the future of the ACA’s cost-sharing reduction payments, which were halted by the administration in October 2017.

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Many insurers responded to the end of CSRs by putting most of the premium increases tied to the payments on silver plans, which are used as the benchmark for federal subsidies. Because premiums in silver plans went up, so did the subsidies.

Though CMS didn’t make any changes to address the practice in the rule, said the administration backs a legislative solution that would end silver loading and fund CSRs.

RELATED: Mandate against ‘silver loading’ not likely during next ACA enrollment

In addition, CMS is requesting comment on ways to potentially rethink the ACA exchange’s auto-enrollment. The agency said in the rule that though re-enrollment is convenient for the consumer, there are several concerns to consider with the practice.

For example, consumers who are automatically re-enrolled may not be aware of any changes to their plans, or may not update their eligibility for tax credits in a timely manner, leading to wasteful spending.

“While allowing auto re-enrollment was designed to be consistent with broader industry practices, this market is arguably different, since most current enrollees receive significant government subsidies, making them potentially less sensitive to premiums and premium changes,” CMS said in the rule.

For 2019, 1.8 million people were automatically re-enrolled in their exchange plans, CMS said.

RELATED: Final Healthcare.gov enrollment numbers drop due to cancellations

On top of the requests for additional comment, CMS said it intends to allow exchange plans to adjust the formularies midyear.

The agency said that would allow them to push members to opt for lower-cost generic drugs. The policy is consistent with how it currently operates Medicare Part D, the agency said in an announcement.

CMS is also proposing a slight decrease in the user fees insurers pay to fund operation of the federal exchange as well as state-based exchanges that use Healthcare.gov. The decrease, from a 3% fee to 2.5% fee, will be put toward lowering premiums, CMS said.

CMS Administrator Seema Verma said the policy is “another first” for the agency, after it saw average premiums on the ACA’s exchanges decrease for the fist time in 2019.

“Under President Trump’s leadership, we’re finally moving the exchange and market in a new direction,” Verma said.

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