CMS unveils 2020 rules for ACA plans
Grant Huang, CPC, CPMA
Director of Content
CMS has just released its final rule on required benefits and coverage guidelines for health plans sold on the Affordable Care Act’s (ACA) exchanges. The 400-page final rule, which is known as the Notice of Benefit and Payment Parameters (NBPP) for the 2020 coverage year, sets out the minimum required benefits for ACA exchange plans as well as how premium assistance is determined for low-income beneficiaries.
The premium assistance formula is one of the most important takeaways from the 2020 rule. For 2020, CMS is rebasing its assistance formula using a combination of average premium costs for both individual and employer-assisted insurance plans. The end result will be an estimated $900 million reduction in the total amount of financial assistance provided by the federal government, according to CMS projections.
That in turn is estimated to translate into as many as 100,000 fewer exchange plan enrollees in 2020. This change is expected to help offset the increased spending on federal subsidies that occurred after the Trump administration decided to stop issuing cost-sharing payments to insurers. When the federal dollars dried up, many insurers responded by “silver loading,” a practice in which they increase the costs of premiums for silver-tier ACA plans.
This capitalizes on a provision in the ACA which uses the premiums for silver-tier plans to determine the amount of federal subsidies available to very low-income individuals (those with annual incomes below 400% of the federal poverty level). When the silver plans’ premiums increased, federal subsidies rose in response due to the way the ACA is written. CMS considered banning silver-loading for 2020, but the final rule did not make any changes to the practice.
Promoting generics, copay accumulators
The NBPP final rule also gives insurers more flexibility on prescription drugs, allowing them to make mid-year changes to their drug formularies. This move is intended to promote the use of generic drugs, CMS says.
Other moves may not be particularly helpful to patients and providers. One new provision allows insurers to impose cost-sharing requirements on patients who opt for a brand-name drug when a medically appropriate generic version is available, even for patients who have met their out-of-pocket spending maximum.
The final rule also allows exchange plans to implement “copayment accumulator” programs, which permit payers to not count drug manufacturers’ coupons for brand-name drugs toward patients’ annual out-of-pocket maximums. Such programs have caused controversy because many patients are surprised to find they have not met their deductibles or out-of-pocket maximums when they had believed that the dollar value of the drug coupons were being counted toward those thresholds. This move is also intended to incentivize generics, CMS says.
Other miscellaneous changes
Here’s a bullet list of the other takeaways from the NBPP final rule for 2020:
- Tweaks the ACA’s risk-adjustment program to better verify the accuracy of diagnosis codes and prescription drug data;
- Establishes a special enrollment period for U.S. residents who become first eligible for ACA subsidies outside of the open enrollment period;
- Gives the federal government more power to exclude insurance agents, brokers, and web-brokers from the exchanges when they violate exchange market requirements; and,
Increases maximum out-of-pocket spending limits by 3.2%, from $7,900 in 2019 to $8,150 in 2020 for individual plans and from $15,800 to $16,300 for family plans.
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