NBPP 2023 Part 1: Standardized Plans!

The Affordable Care Act includes a long list of codified instructions about what's required under the law. However, like any major piece of legislation, many of the specific details are left up to the agency responsible for implementing the law.

While the PPACA is itself a lengthy document, it would have to be several times longer yet in order to cover every conceivable detail involved in operating the ACA exchanges, Medicaid expansion and so forth. The major provisions of the ACA fall under the Department of Health & Human Services (HHS), and within that, the Centers for Medicare & Medicaid (CMS)

Every year, CMS issues a long, wonky document called the Notice of Benefit & Payment Parameters (NBPP) for the Affordable Care Act. This is basically a list of tweaks to some of the specifics of how the ACA is actually implemented.

This morning, CMS issued the final NBPP for the upcoming 2023 Open Enrollment Period. Since there's so many provisions included, this year I've decided to break it into multiple posts which only focus on one or a few of them at a time:

Advancing Standardized Plan Options

In accordance with President Biden’s Executive Order 14036 on Promoting Competition in the American Economy, the rule helps simplify the consumer shopping experience by establishing standardized plan options for issuers offering Qualified Health Plans (QHPs) on HealthCare.gov. With standardized maximum out-of-pocket limitations, deductibles, and cost-sharing features, consumers will be able to more directly compare other important plan attributes, such as premiums, provider networks, prescription drug coverage, and quality ratings when choosing a plan. 

These standardized plan options expand the availability of coverage for services before consumers meet their deductibles, which will make it easier to access important services. They also include simpler cost-sharing structures that will allow consumers to more easily understand their coverage. Issuers offering QHPs on HealthCare.gov will be required to offer standardized plan options at every network type, at every metal level (Bronze, Silver, Gold, and Platinum), and throughout every service area where non-standardized options are offered starting in 2023. These plans will be differentially displayed on HealthCare.gov to help consumers make more informed choices about their coverage.

Additional details from the Fact Sheet:

...CMS finalizes two sets of standardized plan options at each of the bronze, expanded bronze, silver, silver cost-sharing reduction (CSR) variations, gold, and platinum metal levels of coverage, with each set tailored to the unique cost-sharing laws in different sets of states. Issuers of QHPs in FFMs and SBM-FPs that are already required to offer standardized plan options under state rules, such as issuers in the State of Oregon, are exempt from these requirements.

CMS will differentially display these standardized options on HealthCare.gov and will resume enforcement of the existing standardized plan option differential display requirements for web-brokers and QHP issuers utilizing a Classic Direct Enrollment (DE) or Enhanced Direct Enrollment (EDE) pathway. These entities will be able to request to deviate from how standardized options are differentially displayed on HealthCare.gov, so long as the alternate differentiation format provides a similar level of differentiation and clarity as provided on HealthCare.gov.

Several states like California, Massachusetts and (as noted above) Oregon already have standardized ACA plan policies. HealthCare.Gov actually experimented with standardized plans for a couple of years awhile back, calling them "Simple Choice" plans which appeared as a pop-up window during the window shopping/plan selection process.

Unfortunately, this didn't really end up "simplifying" anything; it just added to the confusion. As noted at the time by Heather Caspi of HealthCare Dive:

If consumers still need to identify and compare between standardized and non-standardized plans, it’s unclear whether shopping will be any quicker or easier than before.

“It’s really important to get the consumer shopping experience right, otherwise you might as well not bother,” Sabrina Corlette of Georgetown University’s Center on Health Insurance Reforms told KHN. Corlette recently co-authored a study of states’ efforts to provide standardized plans titled, ”Missed Opportunities: State-Based Marketplaces Fail to Meet Stated Policy Goals of Standardized Benefit Designs.”

Corlette’s paper examined state-based marketplaces that required participating insurers to offer standardized plans in Connecticut, Massachusetts, New York, and Oregon and concluded that, “by allowing insurers to offer nonstandardized options in addition to standardized options and failing to use web-based decision support tools to differentiate between plan options, consumers in these SBMs have limited ability to conduct the plan-to-plan comparisons as originally envisioned by policymakers.”

While this second attempt at adding standardized plans may have a similar problem there's one improvement: The first time around, standardized plans were optional for insurance carriers, meaning that some offered them but many didn't.

This time around, at least, it looks like every carrier will be required to offer standardized plans at every metal level & in every area that they offer non-standardized plans, which should help to some degree. In fact, it's possible that some carriers will voluntarily choose to only offer standardized plans, which would be even better.

I'll have to see how standardized plans are actually implemented before drawing any conclusions, but making them mandatory at all metal levels/service areas is definitely a big step in the right direction in my view.