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On December 21, 2022, the Department of Health and Human Services (“HHS”) issued a proposed rule aimed at advancing health equity and mitigating health disparities while minimizing administrative burden. The HHS Notice of Benefit and Payment Parameters for 2024 (“Proposed Rule”) would streamline ACA health plan selection, simplify marketplace enrollment, and expand access to care for low-income and medically underserved consumers through revision of network adequacy and essential community provider (“ECP”) standards. These proposed changes came in the midst of a record-breaking ACA Marketplace enrollment period, highlighting the increased demand for affordable health care coverage.

Coverage Expansion

The Proposed Rule reflects the Biden administration’s efforts to reduce administrative barriers to enrollment while enhancing overall consumer choice. In order to (i) promote equitable treatment amongst consumers, (ii) ensure continuous coverage, and (iii) strengthen the risk pool, both Federally-facilitated Exchanges and State-based Exchanges on the federal platform (together, “Exchanges”) would be required to accept an applicant’s attestation of projected annual household income when certain tax return data is unavailable. Moreover, enrollees with income inconsistencies would be granted a 60-day extension in addition to the 90 days provided under the current rules.

To mitigate coverage gaps, the Proposed Rule would add a special enrollment period for individuals who are expected to lose Medicaid or Children’s Health Insurance Program coverage. Beginning January 1, 2024, consumers would receive up to 90 days after their loss of Medicaid or CHIP coverage to select a plan for Exchange coverage. Additionally, HHS proposed modifications to the loss-of-coverage special enrollment periods (“SEPs”) to avoid coverage gaps in cases where the old coverage terminates before the end of the month. Under the Proposed Rule, Exchanges could allow coverage to begin on the first day of the month during which the old coverage ends.

Consumer Choice

While expanding provider availability through the addition of new ECP categories is a laudable goal, HHS also aims to mitigate plan choice overload that often leads to consumer confusion and frustration. By limiting the number of non-standardized plan options that issuers can provide on Exchanges to two per product network type and metal level, per service area, HHS hopes that consumers can make more informed and focused enrollment decisions.

As an alternative to limiting the plan offerings, HHS proposed to reinstate the meaningful difference requirement, which was first introduced by the Obama administration in 2015, but was reversed by the Trump administration in 2019. However, the Proposed Rule would strengthen the original standard by modifying the criteria and difference thresholds used to determine whether plans are “meaningfully different” from each other.

Enhanced Access

One of the projected goals of the Proposed Rule is to improve accessibility to affordable health care. This Proposed Rule is a reflection of the current administration’s heightened healthcare oversight aimed at addressing social and economic issues. CMS promotes several health equity initiatives in the Proposed Rule, thereby aligning itself with the administration’s goals of mitigating health disparities.

To advance access to care, particularly to services for low-income and medically underserved consumers, HHS proposed adding two new and distinct ECP categories for 2024: Mental Health Facilities and Substance Use Disorder (“SUD”) Treatment Centers. This would remove these providers from the “Other ECP Providers” category and would require issuers to attempt to contract with at least one SUD Treatment Center and at least one Mental Health Facility.

The COVID-19 pandemic severely impacted health systems, economies, and communities, while amplifying the mental health crisis with which the nation continues to struggle. The Proposed Rule seeks to better facilitate and integrate mental health and SUD services as the pandemic continues to expose and exacerbate weaknesses in the healthcare system.

Re-Enrollment Hierarchies

The Proposed Rule introduces a new policy to help a greater number of people take advantage of cost-sharing reduction (“CSR”) opportunities by granting Exchanges the flexibility to switch consumers from a bronze plan to a silver plan. An eligible enrollee who would otherwise be automatically re-enrolled in a bronze-level qualified health plan (“QHP”) could instead be moved to a silver-level plan with a CSR, as long as the silver premium net of the advanced premium tax credit (“APTC”) is less than or equal to the bronze premium. (This is true even if the current bronze plan remained available). HHS also proposed changes to the hierarchies to create plan preferences for enrollees in QHPs that are no longer available through the marketplace.

Overall Impact Looking Ahead

Building upon the promises set forth by the ACA, the Proposed Rule highlights a renewed commitment to enhancing healthcare equity and affordability by expanding provider availability, simplifying consumer choice, and improving the enrollment process. In addition to the aforementioned changes, the Proposed Rule also permits door-to-door enrollment and updates the risk adjustment models and requirements for agents and brokers to bolster overall program integrity. HHS is seeking to streamline the enforcement and dispute resolution processes, while also alleviating certain consumer burdens by aligning regulations. Comments on the Proposed Rule are due January 30, 2023.