The Affordable Care Act (ACA) recently celebrated its 13^th anniversary with historic enrollment growth in the health insurance Marketplaces and the lowest-ever recorded uninsured rate. With the twin goals of building on the enrollment gains and improving the consumer experience, the Centers for Medicare & Medicaid Services (CMS) has proposed an annual set of requirements and standards for the Marketplaces and health insurers for plan year 2024. The draft rule, known as the “Notice of Benefit & Payment Parameters,” was published in early December, and the final rule is expected soon.

CMS’s proposals received several hundred comments from stakeholders during the public comment period. CHIR reviewed a sample of comments from three stakeholder groups to better understand the impact of the proposed rules. This first blog in the series summarizes comments from health insurers and representative associations. The next two blogs will summarize comments submitted by consumer advocates, and state departments of insurance and state-based marketplaces. For this blog post, we reviewed comments submitted by:

• America’s Health Insurance Plans (AHIP)
• Blue Cross Blue Shield Association (BCBSA)
• Centene Corporation
• Cigna
• CVS Health (formerly Aetna)
• Health Care Services Corporation (HCSC)
• Kaiser Permanente (KP)

The draft Notice of Benefit & Payment Parameters covers a wide range of issues (a detailed summary, in three parts, is available on Health Affairs Forefront here, here, and here). However, this summary of insurance company feedback focuses on just three significant CMS proposals: (1) an effort to streamline consumer decision-making by reducing the number of plans offered; (2) increasing network adequacy standards and the representation of essential community providers in Marketplace plan networks; and (3) introducing an automatic re-enrollment hierarchy to help lower-income consumers access the cost-sharing reduction subsidies for which they are eligible.

Reducing “Choice Overload”

The number of plans available to the average Marketplace consumer has risen dramatically: from 25.9 plans in 2019 to 113.6 in 2023. This “plan choice overload” causes consumer confusion, frustration, and suboptimal plan selection. In an effort to mitigate plan choice overload, CMS has proposed two alternative policies to reduce the number of plans currently being displayed to marketplace consumers. The first would limit Marketplace insurers to two non-standardized plan options per product network type (e.g., PPO or HMO) and metal level. As an alternative to capping the number of plans, CMS proposes instead reinstating the “meaningful difference” standard to reduce the number of look-alike plans that insurers can offer and allow consumers to clearly identify material differences between plan characteristics such as cost-sharing, provider network, and plan type. Under CMS’s proposal, products in the same “group”—by insurer, county, metal level, deductible integration type, and product network type—would need to have a deductible differential of $1,000 or more to meet the meaningful difference standard.

Most of the insurers in our sample strongly oppose CMS’s proposal to limit the number of non-standardized plans to two per metal level. Several argue that consumers want to maintain “choice” of coverage options. AHIP, for example, notes that enrollees have “varying preferences, including access to high-value networks, broad access to providers, specific plans that contract with particular health systems . . . health savings account (HSA) eligibility . . . and much more.” Centene asserts that reducing the number of non-standardized plans will be “very disruptive,” noting that many of their current enrollees will lose access to their chosen plan if the company was required to winnow its offerings. Similarly, HCSC projects that “hundreds of thousands” of its enrollees will be re-mapped into new plans that they did not select. Among our sample of insurers, only Kaiser Permanente “strongly” supports CMS’s proposal. Indeed, the company recommends further phasing non-standardized plans down from two to one in future years.

All of the insurers’ comments in our sample acknowledged that consumer choice overload is a problem, and they had varying recommendations to address it. A few insurers would support limiting the number of non-standardized plans to four or five (instead of two). Several comments also suggested adopting the meaningful difference standard instead of plan limits. However, if CMS does so, they suggest reducing the $1,000 allowable deductible differential to $500. Cigna, for example, “recommend[s] a $500 standard to incorporate additional flexibility and options for consumers[.]” Several insurers argued that CMS could sufficiently resolve the choice overload problem through better consumer decision support tools on HealthCare.gov.

Network Adequacy

CMS implemented new quantitative standards for network adequacy for federal Marketplace plans in plan year 2023. For plan year 2024, the agency has proposed moving forward with new appointment wait time standards. CMS also proposes a requirement for insurers in the federal Marketplace to contract with at least 35 percent of available federally qualified health centers (FQHCs) and at least 35 percent of available Family Planning Providers with their service area—two categories of essential community providers under current regulations.

Several insurer comments in our sample, including from the associations AHIP and BCBSA, ask CMS to delay implementation of appointment wait time standards, arguing that insurers and the agency need more time for “testing,” to develop a process for assessing appointment availability, and to operationalize data collection. (Of note, appointment wait time standards are not a new concept for many Marketplace insurers—at least 15 states already require them.) Insurers also asking CMS to improve its current network adequacy review process. Centene, for example, asks CMS to set a timeline that “accounts for turnaround times on data submission,” and that the review process “provides sufficient time for issuers to respond.”

The insurers also generally oppose CMS’s proposal requiring them to contract with at least 35 percent of available FQHCs and Family Planning Providers. As Cigna frames it, “[m]oving from a threshold across all categories to requiring a threshold for specific categories limits issuer flexibility to account for variables such as provider shortages and distribution, enrollee population distribution, and rural access, and will make it more difficult for issuers to meet these thresholds.” Kaiser Permanente’s letter echoes this sentiment, also adding that the proposed standards would increase their administrative burden.

Automatic Re-enrollment

Although many low-income consumers would benefit from eligibility for plans with cost-sharing reductions (CSRs), many unwittingly forego those additional subsidies by enrolling in a bronze plan (CSRs are only available to silver plan enrollees). To maximize take-up of CSRs, CMS has proposed enabling the Marketplaces to move CSR-eligible enrollees who would otherwise be re-enrolled in a bronze-level plan to a silver-level plan, if the plan is within the same network product type with a lower or equivalent premium after premium tax credits. People who are not CSR-eligible would be automatically re-enrolled in their current plan. California’s state-based marketplace recently implemented a similar process.

The insurers in our sample generally oppose this proposal. BCBSA’s comments assert that “[c]onsumers select plans for reasons beyond price, often prioritizing their insurer and reliability of their coverage, their network, their drugs, or HSA availability.” The association argues that “[m]oving enrollees to a new plan without their knowledge may disrupt their care, impose tax liabilities, and erode their trust in their exchange and their health plan.” Centene, however, is more receptive to the proposal, agreeing that it could result in more people having plans with lower out-of-pocket costs. However, the company urges CMS to adopt “guardrails” to prevent “unintended” consequences, and asks that the agency engage in “sequential implementation” to avoid disruption and consumer confusion. Specifically, the company requests that “[r]e-enrollment hierarchies . . . remain stable until requirements on non-standardized plan limits are finalized[.]” CVS similarly asks that this proposal be delayed until at least 2025.

A Note on Our Methodology

This blog is intended to provide a summary of comments submitted by insurance companies and representative associations. This is not intended to be a comprehensive review of all comments on every provision in the Notice of Benefit and Payment Parameters proposed rule, nor does it capture every component of the reviewed comments. To view more stakeholder comments, please visit https://www.regulations.gov/.