CMS issued the HHS Notice of Benefit and Payment Parameters final rule for 2018 Friday, establishing standards for insurers and each health insurance marketplace for the 2018 plan year.
Finalized policy changes include updates to the risk adjustment program, simple choice health plan options and initiatives to limit misuse of special enrollment periods, among others.
Here are 12 things to know about the final rule.
Risk adjustment model updates
1. CMS will address feedback that the current risk adjustment model underpredicts claims costs for individuals enrolled in health plans for only a portion of the year. An adjustment factor to account for partial year enrollment will begin with the 2017 benefit year.
2. Prescription drug use data will be incorporated in risk adjustment models to better account for health risks of individuals with serious health issues. CMS said using prescription drug use data will enhance risk adjustment model predictability for the 2018 benefit year.
3. CMS will establish a high-cost risk pool calculation in its risk adjustment methodology. The center is finalizing the high-cost risk pool, in which an adjustment to insurers' transfers would fund 60 percent of an insurer's costs for individuals with claims exceeding $1 million.
Payment parameters
4. The final rule includes using external data gathering environment servers to submit data for the risk adjustment and reinsurance programs to recalibrate the models starting with the 2019 benefit year.
5. CMS decided to maintain the user fee for federally-facilitated marketplaces at 3.5 percent of premiums for the 2018 benefit year. The center ruled to charge insurers on state-based marketplaces on the federal platform a user fee of 2 percent for 2018, down from the 3 percent it proposed. CMS said it will use 3 percent of the user fees for marketplace outreach and education.
6. A maximum annual limitation on cost sharing for 2018 of $7,350 for individuals and $14,700 for families was finalized.
Plan options
7. CMS finalized updated standardized health plan options so at least one standardized option in each coverage level (bronze, silver, silver cost-sharing reduction variation and gold) will comply with state requirements. Three sets of simple choice health plans were finalized, with each state only having one standardized option at every coverage level.
8. A standardized health savings account-eligible bronze high-deductible health plan option was also finalized.
Eligibility, enrollment and benefits
9. CMS will code several special enrollment periods to curb misuse and ensure regulation clarity.
10. The child age rating structure will become one age bracket for children ages 0 through 14 and single-year age brackets for individuals ages 15 through 20. CMS said the structure more accurately reflects children's healthcare costs.
11. CMS finalized that insurers can replace all of their existing plans with new products without triggering a market withdrawal if the insurer replaces its products with matching plans.
12. CMS will allow insurers to defer medical loss ratio reporting for new plans issued with a full 12 months of experience in that MLR reporting year.