On November 24, 2023, the U.S. Department of Health and Human Services’ Centers for Medicare and Medicaid Services (“CMS”) published a proposed rule to modify certain Patient Protection and Affordable Care Act (“ACA”) standards that apply to issuers and Marketplaces, as well as requirements for agents, brokers, web-brokers, direct enrollment entities, and assisters that help Marketplace consumers (the “Proposed Rule”).[1] These modifications are intended to further the Biden Administration’s goals of advancing health equity by addressing disparities in access to quality care while minimizing administrative burdens and ensuring program integrity.

Pursuant to the Proposed Rule, CMS is:

1. Increasing Access to Health Care Services
   
   • Requiring State Marketplaces and State-based Marketplaces on the Federal Platform (each a “SBM-FP”) to establish and impose quantitative time and distance network adequacy standards for qualified health plans (“QHPs”) to increase the reasonableness and timeliness of access to health care providers.
   • Allowing states to add routine adult dental services as an Essential Health Benefit (“EHB”) to expand access to adult dental benefits.
   • Requiring that pharmacy and therapeutics committees that are responsible for deciding the drugs that appear on a health plan’s list of covered prescription drugs include a consumer representative to decrease bias in such decisions.
   • Expanding the number of prescription drugs that are subject to EHB coverage protections.
   • Permitting states to expand Medicaid eligibility by disregarding more income and resource threshold standards for individuals that are excepted from the application of the Modified Adjusted Gross Income financial methodology.
2. Simplifying Choice and Improving the Plan Selection Process
   
   • Permitting issuers to offer more non-standardized plan options if they satisfy certain criteria to promote consumer access to plans that are tailored for specific medical needs while avoiding overwhelming consumers with choices.
   • Simplifying the process for state selection of EHB-benchmark plans to decrease administrative barriers to enhance flexibility and reduce administrative complexity. 
   • Requiring all Marketplaces to re-enroll enrollees with catastrophic coverage into a new QHP for each coming plan year to increase the number of enrollees in QHPs and to promote consistency of coverage.
3. Making it Easier to Enroll in Coverage
   
   • Requiring a minimum open enrollment period that that starts on November 1 and ends no earlier than January 15 and is consistent across all Marketplaces to standardize consumer access to enrollment.
   • Requiring State Marketplaces to operate a centralized eligibility and enrollment platform to allow for streamlined applications to decrease consumer burden.
   • Proposing that consumers who enroll in a QHP during a special enrollment period with a regular coverage effective date receive coverage beginning the first day of the month after the consumer selects a QHP to enhance consumer experience and prevent coverage gaps for consumers transitioning between different Marketplaces or from other insurance coverage.
   • Requiring State Marketplaces to check failure-to-reconcile status at least annually and send consumer notices to tax filers found to have failed-to-reconcile to allow filers more notice to make corrections.
   • Requiring Marketplaces to accept consumer attestation of incarceration status without further verification, unless the U.S. Department of Health and Human Services (“HHS”) approves a State Marketplace’s proposed alternative verification process to decrease the costs associated with verification, reduce applicant burden, and streamline the application process.
   • Granting states that operate the Basic Health Program additional flexibility in establishing an effective date of eligibility for enrollment in a standard health plan to prevent coverage gaps for consumers.
4. Enhancing Standards and Guaranteed Consumer Protections
   
   • Protecting the categorization of state-mandated benefits under state EHB benchmark plans to ensure that such benefits remain subject to EHB nondiscrimination rules, the annual limitation on cost sharing, and restrictions on annual or lifetime dollar limits.
   • Requiring states to operate a SBM-FP for at least one year prior to transitioning to operating a State Marketplace to ensure increased ability to adequately serve consumer needs and avoid health care coverage gaps.
   • Imposing minimum standards on online display of information and conduct on web-brokers across all Marketplaces to protect consumer access to accurate and reliable information.
   • Requiring that HealthCare.gov changes be displayed on direct enrollment entity non-Marketplace websites in Federally Facilitated Marketplace (“FFM”) and SBM-FP states within a specific notice period set by HHS to ensure consumer access to updated information.
   • Requiring Marketplace call centers to provide a live call center representative during published hours of operation to assist consumers with their QHP applications.
5. Strengthening Markets
   
   • Proposing that the Federal Data Services Hub income data verification service should be treated as a State function, for which States pay for in advance of access, to allow for more streamlined eligibility verification. CMS proposes that states should have the option to seek federal financial assistance for access to alleviate financial burden on state agencies.
   • Maintaining the 2.2% FFM user fee rate and 1.8% SBM-FP user fee rate from the previous year to promote consistency and financial predictability for insurers operating in these markets.
   • Using enrollee-level data from the Enrollee-Level Data Gathering Environment (“EDGE”) server from 2019, 2020, and 2021 for recalibrating HHS risk adjustment models to ensure that the models accurately reflect the most current claims experience, contributing to market stability.
   • Recalibrating cost sharing adjustment factors for AI/AN plan variants to improve model prediction and increase incentives for engaging historically underserved populations.
   • Reducing the risk adjustment user fee for 2025 from $0.21 to $0.20 per member per month to reduce insurer costs.

The Proposed Rule represents a multifaceted effort to reshape and fortify the healthcare landscape in line with evolving priorities and the pursuit of equitable health outcomes. CMS’s proposed modifications address a vast area of categories, but primarily focus on increasing access to healthcare services, streamlining eligibility determination and plan enrollment, enhancing standards and consumer protections, and strengthening insurance markets.

CMS encourages public input on the Proposed Rule and will consider public comments before it develops a final regulation. CMS will be accepting public comments on this Proposed Rule through January 8, 2024.

FOOTNOTES

[1] See Fact Sheet on Proposed Rule, Ctrs. for Medicare & Medicaid Servs. (Nov. 15, 2023). The Proposed Rule was published by the Federal Register on November 24, 2023.