On December 12, 2022, the U.S. Department of Health & Human Services (HHS) released a proposed rule to refine and update Plan Year 2024 standards for health insurers and Marketplaces under the Affordable Care Act (ACA). In addition to the proposed 2024 Notice of Benefit & Payment Parameters (NBPP) the agency also released a Fact Sheet, the 2024 Draft Letter to Issuers, the 2024 Actuarial Value Calculator and Methodology, guidance on payment parameters, and a response to Alabama’s request for risk adjustment flexibility. Comments on the proposals must be submitted within 45 days after official publication in the federal register.
The proposed rule builds on recently implemented requirements for standardized plans, network adequacy, and fair marketing standards. It continues this administration’s efforts to lower administrative barriers to enrollment and strengthen consumer assistance. It also includes modifications to risk adjustment, Advance Premium Tax Credit (APTC) policy, marketplace transitions, user fees, and other marketplace standards. Throughout the proposed rule and associated materials, the administration emphasizes its interest in enhancing health equity and reducing disparities in health coverage and access.
In this first of three Forefront articles on the 2024 NBPP, we focus on proposed market reforms and consumer assistance improvements. The second and third articles will focus on risk adjustment, proposed changes to marketplace operational standards, and APTC policies.
Standardized Plan Options
HHS is proposing “minor” updates to the standardized plan options offered during open enrollment for plan year 2023. Readers will recall that the Obama administration had introduced standardized plans (called “Simple Choice” plans) for the federally facilitated marketplaces (FFM) beginning in 2017, but these were discontinued by the Trump administration in the 2019 NBPP. The Biden administration re-introduced standardized plans in its 2023 NBPP. Under that rule, issuers in the FFM and state-based marketplaces that use the federal platform (SBM-FP) are required to offer plans with standardized benefits designed by HHS at every product network type, at every metal level, and throughout every service area in which they offer plans in the individual market. The applicable metal levels include both expanded and non-expanded Bronze plans (“expanded” Bronze plans cover at least one non-preventive service pre-deductible or meet the IRS’ definition of a high-deductible health plan and are permitted to have an actuarial value of up to 5 points above the 60 percent standard), Silver (for standard Silver and for each of the three CSR variants), Gold, and Platinum plans.
HHS did not extend the requirement to offer standardized plans to issuers in state-based marketplace (SBM) states, in part because eight of these states already require their own versions of standardized plans. HHS also exempted issuers in the state of Oregon, an SBM-FP, because that state also requires individual market issuers to offer standardized plans. The 2023 rule allows issuers to continue to offer as many non-standardized plan options as they choose.
In the 2023 NBPP, HHS created two different sets of standardized plan designs, one set for states with their own cost-sharing requirements for individual market issuers complying with the laws in those states, and a second set for states without such requirements. HHS also worked to design the standardized plans to be as similar as possible to the most popular plan designs in each state.
HHS calls the new standardized plans “Easy Pricing” plans and consumers can apply filters on HealthCare.gov to view and compare only standardized plans. Web-brokers providing Direct Enrollment (DE) and Enhanced Direct Enrollment (EDE) must also offer and differentially display the Easy Pricing plans consistent with HealthCare.gov’s display, unless HHS approves a request for a deviation.
For plan year 2024, HHS proposes to maintain the Easy Pricing plans on HealthCare.gov, with some modest changes. First, HHS would no longer require issuers to offer a standardized plan at the non-expanded Bronze metal level. The agency found it infeasible to design a non-expanded Bronze plan that includes any pre-deductible coverage that meets the actuarial value target within the permissible de minimis range. They also note that most FFM issuers chose not to offer non-expanded Bronze plans, offering only expanded Bronze instead.
HHS intends to continue the use of four prescription drug tiers in its standardized plans, specifically: generic drugs, preferred brand drugs, non-preferred brand drugs, and specialty drugs. The agency believes limiting the formulary to four tiers promotes understandable drug coverage and facilitates consumers’ ability to compare among plan options. However, they signal openness to expanding the number of formulary tiers in future years and invite comment on the appropriate number of drug tiers in standardized plans.
HHS has received reports that some issuers are not placing certain drugs at the appropriate cost-sharing tiers. For example, some issuers are including generic drugs in the preferred or non-preferred cost-sharing tiers. As a result, the agency proposes to require that issuers place all covered drugs in the appropriate cost-sharing tier unless there is an “appropriate and non-discriminatory basis” for placing the drug in the specialty tier.
Limits For Non-Standardized Plan Options
HHS is proposing to limit the number of non-standardized plans that issuers can offer through the FFM or SBM-FPs to two per product network type and metal level, per service area. For example, under this rule issuers would be limited to offering two gold HMO and two gold PPO non-standardized plans in any service area, beginning in plan year 2024. These limits would not extend to plans offered through SBMs or the SHOP (Small Business Health Options Program) marketplaces, nor would they apply to stand-alone dental plans (SADPs).
As a result of this proposed limit, HHS estimates that the weighted average number of non-standardized plan options available to consumers would be reduced from 107.8 in plan year 2022 to 37.2 in plan year 2024. This number does not include the standardized plan offerings. The agency further estimates that approximately 2.72 million current enrollees would have their plans discontinued as a result of these new limits, requiring issuers to crosswalk them into a new plan for 2024.
In its rulemaking for plan year 2023, HHS raised concerns and solicited comments about “plan choice overload” for marketplace consumers, pointing to numerous studies that have found that too many health plan choices can lead to poor enrollment decisions. In response, many commenters agreed that too many plan offerings can result in consumer confusion and frustration, with many arguing that the number of plan choices now offered on the marketplaces has increased beyond a point that is productive for consumers. Indeed, the number of plans available to the average marketplace consumer has grown from 25.9 in 2019 to 113.6 in 2023.
At the same time, HHS notes that it has implemented a number of improvements to the choice architecture on HealthCare.gov to help consumers better understand and compare their plan options. However, the agency believes that improving the marketplace’s choice architecture is necessary but not sufficient, by itself, to reduce the choice overload that consumers currently face.
An Alternative Strategy
Another way to potentially reduce consumer choice overload is to impose a “meaningful difference” requirement on issuers’ plan offerings. The Obama administration had introduced such a standard in 2015, but this was reversed by the Trump administration in 2019. As originally defined, a plan was considered “meaningfully different” from another plan offered by the same issuer if a reasonable consumer would be able to identify material differences between plan characteristics such as (1) cost sharing or out-of-pocket maximum; (2) provider networks; (3) covered benefits; (4) plan type; (5) HSA eligibility; or (6) self-only, non-self-only, or child only offerings.
HHS is proposing, as an alternative to limiting the number of issuers’ plan offerings, to reinstate the meaningful difference standard. However, they note that many commenters and stakeholders have argued that the original meaningful difference standard was not rigorous enough to meaningfully reduce duplicative plan designs. As a result, HHS would update the meaningful difference standard. The agency proposes that it would group plans by issuer ID, county, metal level, product network type, and deductible integration type, and then evaluate whether plans within each group are meaningfully different, based on differences in deductible amounts. Deductibles would have to differ by more than $1,000 to satisfy the new standard.
HHS is seeking comment on its two proposed approaches to reducing consumer choice overload: (1) limiting the number of plan offerings or (2) reinstating a meaningful difference standard that is more rigorous than the one applied in plan years 2015-2018.
Rate And Benefit Information For QHPs
A Uniform Age-Rating And Eligibility Methodology For SADPs
HHS proposes to require that SADP issuers set their premium rates and determine plan eligibility based on an enrollee’s age at the time the policy issued or renewed, beginning in 2024. To date, SADP issuers have had flexibility to decide how an applicant or an enrollee’s age is determined. The agency notes that the majority of SADP issuers use an individual’s age upon policy effective date to determine eligibility and rates and argues that this is also the most straightforward methodology for consumers to understand. The agency asserts that allowing SADPs continued flexibility to rate by other methods creates too much complexity for both the marketplaces and consumers. HHS would extend this requirement to SADP issuers in FFM, SBM-FP, and SBM states.
Guaranteed Rates For SADPs
Since 2014, HHS has allowed SADP issuers to offer either guaranteed or estimated rates. Under a guaranteed rate, the SADP issuer must commit to charging the approved rate, whereas under estimated rates, the enrollee must contact the issuer to find out their final rate. HHS notes that this flexibility was only made available to SADP issuers in the early years of the marketplaces because of operational constraints. The agency has now improved the required templates and forms, enabling more standardized rating rules for dental plans. HHS thus proposes to require SADP issuers, as a condition of marketplace certification, to submit only guaranteed rates. The agency argues that requiring guaranteed rates would help prevent inaccurate determinations of APTCs for the pediatric dental portion of a consumer’s premium, which would primarily help lower-income consumers who qualify for APTCs. The agency also notes that even though SADP issuers currently have the flexibility to submit estimated rates, the vast majority choose to submit guaranteed rates. HHS proposes to extend this requirement to SADP issuers in FFM, SBM-FP, and SBM states.
Plan And Plan Variation Marketing Name Requirements For Qualified Health Plans
In recent years, HHS has received complaints from consumers in numerous states about misleading or deceptive plan marketing names. The agency, alongside state insurance regulators, investigated and found that many plan names that include cost-sharing or other benefit details often are incorrect or misleading, based on information submitted in plan documents. Examples of such misleading plan names include cost-sharing amount limits that do not indicate that such limits are only available for a certain prescription drug or provider network tier, dollar amounts that do not specify what they refer to, and the use of “HSA” in the plan name when the plan does not allow the enrollee to set up an HSA.
HHS proposes to require that marketing names for marketplace qualified health plans (QHP) include correct information and do not include content that is misleading. To enforce this, HHS would review plan marketing names during the annual QHP certification process, in collaboration with state regulators in FFM states. The agency seeks comment on this proposal. In particular, they ask whether the agency should establish a required format for plan marketing names, with specified elements, for use by all QHPs.
Plans That Do Not Use A Provider Network
HHS proposes to require all marketplace plans, SADPs, and SHOP plans to use a network of providers that comply with its network adequacy and essential community provider (ECP) requirements. If finalized, this would eliminate the exemption that applies to plans that do not maintain a provider network. The agency notes that, since 2016, only one FFM issuer has offered a plan that does not use a provider network.
The ACA requires that marketplace plans ensure a “sufficient choice” of providers and provide information to enrollees about the availability of in-network and out-of-network providers. The statute also requires that plans “include within health insurance plan networks those essential community providers, where available, that serve predominantly low-income, medically-underserved individuals.” HHS argues that plans cannot comply with these requirements, and the agency cannot effectively enforce compliance, if the plan does not use a provider network. The agency also believes that requiring use of a provider network would better protect consumers from potential harms, such as lack of provider access, that can occur when a QHP doesn’t use a network. HHS seeks comment on this proposal, including the requirement to extend it to SADP issuers.
Appointment Wait Time Standards
Beginning in 2023, issuers offering plans on the FFM and SBM-FP must ensure that their enrollees can obtain provider services within a maximum time or distance from their homes. In its 2023 NBPP, HHS also required QHP issuers to meet minimum appointment wait time standards but delayed implementation of that requirement to plan year 2024, citing concerns about the compliance burden on issuers. Here, HHS puts its FFM and SBM-FP issuers on notice that they must begin working with their network providers to collect the data needed to assess appointment wait times and determine if their provider network meets the wait time standards detailed in the 2023 Letter to Issuers. HHS will begin reviewing issuer attestations of compliance for plan year 2024.
Essential Community Providers
In its payment notice for 2023, HHS set a new bar for the inclusion of essential community providers (ECPs) in marketplace plan networks. For plan year 2023 and beyond, issuers in the FFM must have 35 percent of available ECPs participating in their plan networks, up from the 20 percent threshold required in past years. QHPs must offer a contract in good faith to at least one provider in each ECP category in each county in the plan’s service area. Currently, there are six categories of ECP providers:
- Federally Qualified Health Centers (FQHC)
- Ryan White Program Providers
- Family Planning Providers
- Indian Health Care Providers
- Inpatient Hospitals
- Other ECP Providers (defined to include Substance Use Disorder Treatment Centers, Community Mental Health Centers, Rural Health Clinics, Black Lung Clinics, Hemophilia Treatment Centers, Sexually Transmitted Disease Clinics, and Tuberculosis Clinics).
In the 2024 NBPP, HHS is proposing two modifications to its ECP standards. First, it would create two new and distinct ECP categories: Mental Health Facilities and Substance Use Disorder (SUD) Treatment Centers. These providers would thus be removed from the “Other ECP Providers” category. Creating these two new categories would require issuers to attempt to contract with at least one SUD Treatment Center and at least one Mental Health Facility. HHS would also add Rural Emergency Hospitals as a provider type in the “Other ECP Providers” category.
Second, HHS is proposing to require QHPs to contract with at least 35 percent of available FQHCs and at least 35 percent of available Family Planning Providers that qualify as ECPs within the plan’s service area. This would be in addition to the existing requirement that plans have at least 35% of all available ECPs within their service area, in-network. For 2024, HHS is focusing on FQHCs and Family Planning Providers because these are the largest categories of providers (representing approximately 62% of all facilities on the ECP list). However, the agency is considering adding a specified minimum threshold to other ECP categories in the future. HHS does not believe this requirement would be difficult for QHP issuers to meet, noting that of 2023 QHP issuers, 75% would already meet or exceed the 35% threshold for FQHCs and 61% would meet the threshold for Family Planning providers.
Prohibiting Mid-Year Terminations For Dependent Children Who Reach Maximum Age
The ACA requires group health plans and insurance issuers that offer coverage to dependent children to allow those children to stay on their parents’ plan until age 26. Operationally, HealthCare.gov requires issuers that cover dependent children to maintain that coverage until the end of the plan year in which they turn 26. In this proposed rule, HHS would codify this requirement in regulation to provide more clarity for participating issuers and reduce enrollee uncertainty about their coverage. This requirement would apply to plans offered through the FFM and SBM-FPs. SBMs could implement a similar rule at their option. The agency notes that, with respect to families that receive APTCs, the marketplace makes eligibility determinations for the entire plan year. The marketplace will continue to pay APTCs to the issuer, including the portion attributable to a dependent child, through the end of the plan year in which the dependent child turns 26. If otherwise eligible, the family member that has turned 26 will be re-enrolled into a separate policy beginning January 1 of the following plan year, with any APTCs for which they are eligible.
Establishing A Timeliness Standard For Notices Of Payment Delinquency
When a plan enrollee becomes delinquent in making premium payments, HHS requires insurers to send a notice to the enrollee so they have an opportunity to pay unpaid premiums and avoid a termination of their coverage. In conducting oversight of issuers, the agency found that some were delaying sending these notices, in extreme cases preventing the enrollee from correcting their delinquency. HHS is thus proposing establishing a timeliness standard for these notices and asks for comment on what a reasonable timeframe would be.
Standards For Navigators And Other Consumer Assisters
Allowing Door-To-Door Assistance
Federal rules currently prohibit Navigators, certified application counselors, and non-Navigator assistance providers (“Assisters”) from going door-to-door or using unsolicited means to provide enrollment assistance to consumers. HHS is proposing to repeal that prohibition. The agency notes that it has established safeguards to ensure that Assisters are maintaining the privacy and security of consumers’ information. It also argues that prohibiting Assisters from going door-to-door creates barriers for consumers who must make appointments to obtain enrollment help and imposes undue burdens on individuals whose travel is limited by lack of mobility or affordable transportation, or who are immunocompromised.
Rules For Brokers And Agents
The proposed rule would establish new requirements for agents, brokers, and web-brokers that assist consumers with FFM and SBM-FP enrollments. Existing federal rules enable HHS to suspend marketplace agreements with brokers and agents for up to 90 days, when there is evidence of fraud or abusive conduct. In cases of severe misconduct, HHS can terminate the agent or broker’s agreement with the marketplace. In both cases, agents and brokers can try to rebut the charges against them and restore their ability to facilitate enrollments.
Noting that the process for reviewing agent and broker rebuttal materials is time intensive and often requires review of complex technical information and data, HHS is proposing to extend the timeframe for review. Specifically, HHS is proposing to give itself up to 45 days to review rebuttal evidence from brokers and agents who have had their marketplace agreements suspended, and up to 60 days to review submissions from agents and brokers that have had their marketplace agreements terminated.
The proposed rule would also require agents, brokers, and web-brokers to document that their clients (or authorized representatives) have reviewed and confirmed their eligibility information before they submit an application. The documentation would need to include the date the consumer reviewed the application, the consumer’s name (or authorized representative’s name), an explanation of the attestations in the application, and the name of the agent, broker, or web-broker providing the assistance. Brokers and agents would need to maintain this documentation for at least 10 years and be able to provide it to HHS upon request.
HHS observes that it has received consumer complaints about agents, brokers, or web-brokers submitting incorrect application information on their behalf. The agency notes that these complaints are difficult to investigate because they often involve one person’s word against another’s. HHS believes that requiring documentation that the consumer has reviewed and confirmed their application information could help with the adjudication and resolution of such complaints. Although HHS would not prescribe exactly how agents, brokers, and web-brokers should obtain the required documentation, they would provide a non-exhaustive list of acceptable methods. The agency seeks comment on this proposal, including information on current best practices among the agent/broker community.
The proposed rule would also require FFM and SBM-FP agents, brokers, and web-brokers to document that they have received a consumer’s consent to assist them with a marketplace eligibility application. This consent would need to include the date, the consumer’s name (or authorized representative), and the name of the agent, broker, or web-broker. While the agency declines to prescribe the form of consent, they note that it could take the form of a signature or a recorded verbal authorization. The broker, agent, or web-broker would be required to maintain a record of the consent for at least 10 years and be able to produce it for HHS upon request. The agency notes that they have received consumer complaints alleging that they were enrolled in marketplace coverage without consent. When investigating these complaints, HHS has found agents and brokers who attest to receiving consent but cannot produce reliable records to defend themselves from the allegations.
The Robert Wood Johnson Foundation provided grant support for the author’s time researching and writing this post.