NBPP 2023 Part 3: Improved Actuarial Value & Stronger Nondiscrimination rules!

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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:

(Note: QHP = Qualified Health Plan...basically, an ACA-compliant major medical policy available on an ACA exchange.)

Increasing Value of Coverage for Consumers

Under the rule, CMS is updating the allowable range in metal coverage levels for non-grandfathered individual and small group market plans. This change will likely require some plans to increase the generosity of their coverage, making it more comprehensive, and lower costs for many consumers. In addition, these changes will make it easier for consumers to compare plans at the various coverage metal levels (Bronze, Silver, Gold, and Platinum) and distinguish between the plan offerings. 

Additional details from the Fact Sheet:

Changes to Actuarial Value (AV) de Minimis Ranges

CMS finalizes changes to the AV de minimis ranges to +2/-2 percentage points for all individual and small group market plans subject to the AV requirements under an EHB package, affecting bronze, silver, gold, and platinum levels of coverage. CMS also finalizes a de minimis range of +5/-2 for expanded bronze plans that cover and pay for at least one major service, other than preventive services, before the deductible or meet the requirements to be a high deductible health plan (HDHP). Additionally, CMS finalizes a de minimis range of +2/0 percentage points for individual market silver QHPs and a de minimis range of +1/0 percentage points for income-based silver CSR plan variations. The narrowing of the de minimis ranges of individual market silver QHPs will influence the generosity of the Second Lowest Cost Silver Plan (SLCSP), the benchmark plan used to determine an individual’s Payments of the Premium Tax Credit (PTC). As a result, subsidized enrollees will likely receive increased premium tax credits.

Under the ACA's "metal level" rules, exchange plans are available in four tiers: Bronze, Silver, Gold and Platinum, which are supposed to cover roughly 60%, 70%, 80% or 90% of the average enrollee's in-network medical expenses. However, it's impossible to say that a given policy will cover exactly that percentage, so CMS gives the insurance carriers some leeway higher or lower.

The problem is that if you make that leeway too wide, the plans start to bleed into each other, causing confusion. A "Silver" plan with a 73% Actuarial Value (AV) becomes extremely difficult to distinguish from a "Gold" plan with a 77% AV. To resolve this, CMS is tightening things up so Silver is closer to 70%, Gold closer to 80% and so on. 

Increasing Access for Consumers and Removing Barriers to Coverage

The final rule aims to protect consumers from discriminatory practices related to the coverage of the essential health benefits (EHB) by refining the CMS nondiscrimination policy. Specifically, a benefit design that limits coverage for an EHB on a basis protected from discrimination under this rule (such as age and health condition) must be clinically-based to be considered nondiscriminatory. The rule also updates Quality Improvement Strategy Standards to require issuers to address health and health care disparities. 

Additional details from the Fact Sheet:

Refine Essential Health Benefits (EHB) Nondiscrimination Policy for Health Plan Designs

CMS refines its EHB nondiscrimination policy to ensure that benefit designs, particularly benefit limitations and plan coverage requirements for EHB, are based on clinical evidence. CMS provides examples that illustrate presumptive discriminatory plan designs, such as discrimination based on age and health conditions. CMS rules already provide that an issuer does not provide EHB if its benefit design, or the implementation of its benefit design, discriminate based on an individual’s age, expected length of life, present or predicted disability, degree of medical dependency, quality of life, or other health conditions.

In the proposed rule, HHS proposed amendments to certain regulations to explicitly identify and recognize discrimination on the basis of sexual orientation and gender identity as prohibited forms of discrimination based on sex consistent with the Supreme Court’s decision in Bostock v. Clayton County, 140 S. Ct. 1731 (2020), and HHS nondiscrimination policy that existed prior to the 2020 regulatory amendments HHS made in conformance with the “Nondiscrimination in Health and Health Education Programs or Activities, Delegation of Authority” final rule, 85 FR 37160 (June 19, 2020). In connection with discriminatory benefit designs prohibited under § 156.125, HHS also included in the proposed rule an example related to gender-affirming care that was intended to illustrate a health plan design that presumptively discriminates against enrollees based on gender identity.

Currently, HHS is developing a proposed rule that also will address prohibited discrimination in health coverage based on sex under section 1557 of the ACA. Because HHS’s proposed rule implementing section 1557 of the ACA will also address issues related to prohibited discrimination based on sex, HHS is of the view that it would be most prudent to address the nondiscrimination proposals related to sexual orientation and gender identity in the 2023 Payment Notice proposed rule at a later time, to ensure that they are consistent with the policies and requirements that will be included in the section 1557 rulemaking. The Department is committed to removing barriers to coverage because it can lead to improved health outcomes in the LGBTQI+ community. In advance of a future rulemaking to address these provisions, HHS will continue to interpret and enforce section 1557 of the ACA and its protections against sex discrimination to prohibit discrimination on the basis of sexual orientation and gender identity in all aspects of health insurance coverage governed by section 1557.

Kudos to the Biden Administration. Needless to say, members of LGBTQI+ communities are under assault at every level across the country in many states right now, and it's important for them to know that the federal government is in their corner.