Just in time for plan application and premium rating season, federal regulators have finalized market policies for the ACA's second open enrollment period, while continuing the tradition of leaving a few important issues to-be-determined.
In a 436-page final rule notice, the Centers for Medicare & Medicaid Services outlined policies covering premium stabilization, prescription drug access, product discontinuation, "mini med" plans and consumer assistance for the 2015 benefit year -- as well as intentions for 2016 and beyond.
"We continue to be pleased with the success of the Marketplace in enrolling more than eight million consumers during this first open enrollment period," wrote Mandy Cohen, MD, director of CMS's Center for Consumer Information and Insurance Oversight, in a blog post summarizing the rules.
"Building on that success and learning from this historic first enrollment period, the policies released today ensure that consumers, employers, and health insurance issuers have the guidance and information they need to prepare for next year and beyond," Cohen wrote.
Consumer information
Some of the new policies are meant to address concerns from consumer advocates, like the process for requesting access to a drug that isn't on a member's plan formulary. CMS is now requiring qualified health plans to include a special process for members to request coverage for a certain non-formulary drug and get a decision within 24 hours, when members are "suffering from a serious health condition" or "in a current course of treatment using a non-formulary drug."
The agency is also finalizing standards for plan discontinuation and renewal, reminding health plans to make it clear that Medicare eligibility is not a basis for non-renewal in the individual market, and offering guidance on scenarios that might come up as insurers evaluate their exchange portfolios.
In both the individual and group markets, insurers "must guarantee availability and guarantee renewability at the option of the plan sponsor or individual of the particular product that they purchased," the regulators wrote. Product discontinuation is permitted at the market level, but the agency wants to curb significant reductions within defined service areas, with a "uniform modification of coverage" standard. That will be met, the agency wrote, if plan availability changes are minor enough that they continue "to cover a majority of the same service area."
For fixed-dollar indemnity policies -- so-called mini-med plans that even after health reform may attract buyers looking to fill gaps left by their high deductibles -- CMS is allowing sales on a per-service basis and only to consumers who have already met the ACA's minimum coverage requirement.
The fixed-indemnity plans must be independent of other health coverage and fixed-dollar benefits have to be paid out regardless of the expenses. Issues must also inform consumers with the statement: "This is a supplement to health insurance and is not a substitute for major medical coverage. Lack of major medical coverage (or other minimum essential coverage) may result in an additional payment with your taxes."
3Rs tweaks
To help keep the market stable enough for only moderate premium increases, CMS is going forward with its proposal to adjust the risk corridors formula, while deciding to keep a lower attachment point for reinsurance.
The risk corridor program's formula will have its administrative costs and profit ceilings each raised by two percent, to 22 percent for administration and five percent for after-tax profits. "This adjustment," CMS regulators wrote, "will be applied uniformly in all states for 2015 to help with unexpected administrative costs and pricing uncertainties," although they won't be be factored into medical cost ratios.
For reinsurance next year, CMS is keeping the attachment point at $45,000, down from a proposed $70,000, and for 2016, it will recalculate the factors for some high-cost conditions.
"Although some inaccuracy in our coefficients is inevitable due to lags in the data, we believe that we will be able to mitigate this problem if we recalculate, on an annual basis, the weights assigned to the various HCCs and demographic factors," regulators wrote.
As for the 3Rs budget neutrality, an issue of interest to finance hawks and defenders of the ACA alike, CMS anticipates that the programs will pay for themselves, but if they don't, the agency said it would first allocate contributions to the risk corridor and reinsurance pools and "use other sources of funding….subject to the availability of appropriations."
Quality ratings
By 2016, according to the ACA, exchange plans need to come with quality ratings for consumers. CMS is getting ready to create a system equivalent to Medicare star ratings.
Next year, the agency is going to start collecting data from qualified health plan issuers, for both state and federally-managed exchanges.
"We believe that an approach where each Exchange displays quality ratings calculated by HHS based on a standard scoring methodology allows for reliable, uniform, and comparable QHP ratings across Exchanges," regulators wrote.
Along with the quality ratings (technical details to come, CMS said), after 2016 exchanges will eventually show past enrollees satisfaction results for plans with more than 500 members, based on the Consumer Assessment of Health Providers and Systems Health Plan 5.0 Medicaid survey.
Health plans will be able to use both quality ratings and enrollee survey data as part of their marketing, and state exchanges are free to start offering the quality and satisfaction survey information ahead of the feds. Covered California was the first state exchange to offer quality ratings with an early stage ranking system unveiled midway through open enrollment, with plans to offer a snapshot of network clinical performance based on claims and survey data.