CMS finalizes rule that calls for standardized plan options, network adequacy reviews for ACA exchanges

Insurers on the Affordable Care Act will have to develop standardized plan options and prepare for network adequacy audits on the law’s insurance exchanges starting next year, according to a final rule. 

The Centers for Medicare & Medicaid Services (CMS) released the final Notice of Benefits and Payment Parameters rule on Thursday outlining regulations for the exchanges for the 2023 coverage year. The agency finalized several major changes to standards for insurers and brokers that assist consumers to pick plans.

“This policy will make it easier for people to choose the best plan that meets their needs by standardizing plan options, like maximum out-of-pocket limitations, deductibles, and cost-sharing features,” CMS Administrator Chiquita Brooks-LaSure said in a statement.

One of the major key changes, which drew concerns from the insurance industry, requires issuers to offer a standardized option at every plan tier. 

Insurers can still offer plans that are not standardized, but if they do then they must offer a plan of the same tier that is standardized. For instance, a plan that offers a nonstandardized gold tier plan must offer a standardized option in the same tier. 

Issuers that are already required to offer standardized plan options due to state law are exempt from the federal requirements. 

“CMS will differentially display these standardized options on and will resume enforcement of the existing standardized plan option differential display requirements for web-brokers and [qualified health plan] issuers utilizing a Classic Direct Enrollment or Enhanced Direct Enrollment pathway,” the agency said. 

Another key change is that CMS will start to review network adequacy in every state with a federally facilitated marketplace, but states already doing such reviews are exempt. 

Plans will be evaluated based on time and distance standards starting in 2023. But in 2024, plans will also have to follow appointment wait time standards. 

These evaluations will occur when a qualified health plan goes through the certification process. 

“Issuers that are unable to meet the specified standards would be able to submit a justification to explain why they are not meeting the standards, what they are doing to work towards meeting them and how they are protecting consumers in the meantime,” CMS said in a fact sheet. 

Other parts of the final rule include:

  • A user fee rate for federal-run marketplaces of 2.75% of a premium and state-based marketplaces of 2.25%.
  • Refining essential health benefits to better include equity. CMS refined its essential health benefits’ nondiscrimination policy to ensure that benefit designs are based on clinical evidence.
  • Abandoning a proposal to create a "two-stage" weighted risk adjustment model for ACA plans.
  • Updating Quality Improvement Strategy standards to mandate that plans address healthcare disparities as a specific topic area in the strategy. An insurer participating in the market must implement and report on a QIS including at least one topic area such as improving hospital readmissions. Now, one of those topic areas is reducing healthcare disparities, part of a larger agencywide effort to improve equity.

Key parts of the rule such as the standardized plan options are likely to generate significant pushback from the insurance industry. 

Insurance lobbying group AHIP said in a statement back in January when the proposed rule was issued that the standardized plan options would stifle innovation. It would also be a burden for plans to roll out key parts of the standardized options, AHIP said at the time. 

The rule comes on the heels of record-breaking enrollment gains for the exchanges, which signed up 14.5 million people for the 2022 coverage year. However, a big driver of those gains were enhanced subsidies that lower the cost of healthcare, which expire after this year