CMS raises cap on nonstandard plans in final ACA exchange rule

The Biden administration is giving insurers a bit more breathing room to offer nonstandardized plans on next year.

The Centers for Medicare & Medicaid Services (CMS) finalized its annual Notice of Benefit and Payment Parameters rule late Monday, and the regulation's final version allows insurers to offer four nonstandard plans per region on the federal exchange, up from two plans in the proposal.

The two-plan limit drew heat from the insurance industry, which argued that limiting plan options would hinder innovation and restrict consumers' choices. AHIP, the leading payer lobbying group, said the move "would harm competition, disrupt coverage for existing enrollees, and stifle value-based insurance designs."

CMS said upping the number of nonstandard plan options to four "will reduce plan choice overload while continuing to provide a robust number of options for consumers to help fit their health needs."

The rule also finalizes a special enrollment period that would allow people who lose coverage in Medicaid or the Children's Health Insurance Program to secure a plan on the Affordable Care Act's exchanges. Medicaid eligibility determinations were put on pause during the COVID-19 pandemic but have resumed as of April 1.

Analysts have warned that 15 million people could be booted from the Medicaid program during the redetermination process. States expect that it will take a year or longer to clear the pandemic backlog.

The final Notice of Benefit and Payment Parameters rule would also ease restrictions for assisters who help people navigate their care, enabling them to assist with insurance enrollment. CMS said it expects this change could improve health literacy, particularly in rural areas, and better inform people about their benefits.

In addition, the final rule adds two new essential community provider categories that aim to boost access to behavioral health care. One category covers mental health facilities and another covers substance abuse treatment centers, CMS said.

CMS will also extend requirements for plans to contract with 35% of available ECPs in a plan's coverage area to two further categories: federally qualified health centers and family planning providers.

“We’ve made great progress with record insured rates, but affordable health care remains a concern across the nation,” said CMS Administrator Chiquita Brooks-LaSure in a release. “As we continue to work toward accessible and equitable health care for all Americans, the 2024 Notice of Benefit and Payment Parameters Final Rule we’re finalizing today will make it easier for consumers to access, choose and maintain the health coverage that best fits their needs.”