Final 2020 Health Insurance Marketplace Rules Are a Mixed Bag for Consumers

On April 18, 2019, the Trump Administration finalized the Notice of Benefit and Payment Parameters for 2020 (NBPP). This rule will govern health insurance marketplaces and set the framework for insurance companies to propose plans and premium rates for 2020.

Consumer advocates achieved several important victories in the final 2020 NBPP. These include staving off some proposals that would have damaged health insurance marketplaces, at least for now. Many of these victories resulted from comments that Families USA and its partners submitted.

Contrarily, the final rule also establishes harmful changes that will decrease access to high-quality, affordable coverage and care for families across the country. These changes include increased premiums for low- and middle-income people and increased out-of-pocket costs.

Victories for Consumers in the 2020 NBPP

When the U.S. Department of Health and Human Services (HHS) proposed the 2020 NBPP in January 2019, the draft rule included consideration of many policies that would harm consumers’ access to high-quality, affordable health coverage and care. Some of the most important victories for consumers regarding the final NBPP involve Administration decisions not to move forward with proposals that were under serious consideration; some others are proactive steps that will improve health coverage and care.

Auto-Reenrollment Continues

In the summary to the proposed NBPP, HHS raised concerns about auto-reenrollment, through which consumers who take no action during open enrollment retain their current health plan for the upcoming plan year. Families USA and our partners supported auto-reenrollment in our comments. Approximately 3.4 million people retained coverage through auto-reenrollment in 2019 — 30% of all marketplace enrollees nationally, according to data from the Centers for Medicare and Medicaid Services. We are relieved that the final rule retained auto-reenrollment.

Silver-Loading Remains Permissible

In 2017, President Trump stopped the federal government from paying insurers for furnishing legally required cost-sharing reductions to low- and moderate-income consumers enrolled in silver-tier marketplace plans. Most states reacted by letting carriers recoup the resulting claims costs by raising premiums nominally for silver plans — a practice commonly known as “silver loading.” For most consumers on the marketplace, this had the effect of raising premium tax credit (PTC) amounts, because PTCs equal the difference between a consumer’s income-based premium payment amount, which is set by the Affordable Care Act, and the cost of the second-lowest silver plan. With higher PTCs, millions of consumers have obtained zero-cost bronze coverage or enrolled in gold plans for which they pay less than for silver plans. The non-partisan Congressional Budget Office concluded that silver loading led to between 2 and 3 million additional people signing up for PTC-funded marketplace coverage.

The proposed NBPP sought comments on how to address silver loading. However, even in its proposed form, the NBPP rule indicated there would be no change in policy until at least 2021. Families USA and other advocates have stressed the danger to consumers of modifications to the current structure of cost-sharing reductions, unless policymakers take care to keep consumers who have benefited from silver loading whole. The continuation of silver loading is thus a victory in the 2020 NBPP.

Abortion Coverage Complications Are Avoided

The proposed version of the NBPP required insurers that opt to cover abortion services to offer the same plan with an exclusion of abortion services. Families USA and many partners commented that such a requirement would discourage insurers from offering abortion coverage in any of their plans. Furthermore, commenters noted that this requirement would be unnecessary because plans that cover abortion already must comply with the Hyde Amendment, which generally forbids using federal funds for abortion services. The Administration received over 25,000 comments regarding the abortion provision. Fortunately, it will not implement the proposed changes regarding abortion requirements for 2020. Advocates’ comments on the rule helped keep reproductive rights in place for now, but this remains an issue for continued advocacy because the Administration could change course in the future. Additionally, on May 2, 2019, the Administration released a final rule that will allow providers to refuse to provide abortion care based on personal moral or religious objections. Another proposed rule, if finalized, will require insurers to bill consumers separately for the portion of their premiums that covers abortion services.

New Special Enrollment Period Is Created

The NBPP expands opportunities for consumers to qualify for a special enrollment period (SEP), letting consumers sign up for coverage on HealthCare.gov or change plans without waiting for the next open enrollment period if their income declines mid-year. Under existing rules, consumers enrolled in a marketplace plan and whose incomes were too high for PTCs could qualify for a SEP and then shift plans if their income fell to the point where they qualified for PTCs. The NBPP would extend the SEP to people who are enrolled in off-marketplace individual market coverage, letting them transition to PTC-funded insurance offered on HealthCare.gov. This change will take effect in all states that use the federal HealthCare.gov enrollment platform. State marketplaces can also elect to take advantage of this SEP. Advocates and policymakers in states that run their own marketplaces may want to ensure their states are aware of this opportunity. Special enrollment periods are another area in which the comments of Families USA and other advocates appear to have been critical.

Drug Coverage is Protected

The proposed NBPP considered complex policies that would allow insurers to stop counting brand-name drugs as an essential health benefit that they are required to cover in certain circumstances. Although Families USA strongly supports the use of generic drugs when possible, this proposed policy was overly burdensome and would have put consumers’ access to care at risk. In response to comments from Families USA and our partners, HHS decided not to finalize this proposal. The proposed rule also would have allowed insurers to exclude manufacturers’ coupons for brand-name drugs from counting toward a plan’s out-of-pocket spending maximums when a generic alternative is available. Although Families USA understands it is important to encourage the use of less costly generics, we raised concerns in our comments that some consumers may require brand-name drugs for medical reasons. In response to our comments, the final rule now requires insurers to count coupons toward the annual limit if an appeals or exceptions process finds that a consumer needs a brand-name drug. A proposal to allow midyear formulary changes under the rule was not finalized. However, HHS noted that nothing under current law in most states prevents midyear formulary changes.

Use of Private Web Broker Websites Is Forbidden for Navigators and Assisters

The proposed rule would have permitted Navigators and assisters to use private web broker websites to help consumers select a plan and enroll in health coverage, instead of using HealthCare.gov or a state marketplace website. Families USA and partner groups opposed this proposal. Web broker sites are not guaranteed to provide truly unbiased information about health plans; instead, they can display plans in ways that prioritize those that are most profitable for the web broker. They may also sell products that do not provide comprehensive health coverage — such as short-term plans — and display them in confusing ways. The final 2020 NBPP does not permit Navigators and assisters to use private web broker sites. However, other concerning policies regarding web brokers are included in the rule, as described below.

Risk Adjustment is Improved

Effective, appropriate risk adjustment is essential to enable people with preexisting conditions to obtain meaningful access to comprehensive coverage. For plans whose members are likely to generate above-average costs, risk adjustment provides money from plans whose members are likely to generate below-average costs. Risk adjustment payments that are accurately calibrated to risk can eliminate plans’ incentives to discriminate against high-cost consumers in their marketing, benefit design, or other arrangements.

One important positive change in the NBPP’s approach to risk adjustment involves the risk adjustment payment triggered by insurance claims for Hepatitis C drugs. In the past, this payment was exceptionally high. HHS agreed with comments from Families USA and others noting that carriers could “game” this risk-adjustment factor by delaying the start of enrollees’ treatment to spread it over two calendar years, thus paying the insurer twice for a single course of care. The agency addressed these concerns by substantially lowering the amount of this risk adjustment factor. Further work may be needed, but this was an important and positive step.

A second improvement to risk adjustment is the continued commitment to use claims data from the Affordable Care Act-regulated individual and small-group markets to set risk adjustment factors. In the past, HHS relied on data from the large group market, whose enrollees may have a different risk profile than people who enroll in the individual market. For example, young adults are more likely to take advantage of employer coverage than to sign up for individual coverage, because participation in group coverage is more streamlined and employer premium costs are typically lower. HHS is gradually shifting to using data about individual and small group market claims to calibrate risk adjustment; the final NBPP states that the agency will consider using these data to calibrate separate risk adjustment factors for the two markets. More accurately calibrated risk factors limit insurers’ incentives to discourage enrollment by consumers with particular health profiles or risk factors. They support plans’ competition to provide better consumer service rather than avoid consumers who carriers deem bad risks.

Harms to Consumers in the 2020 NBPP

Notwithstanding the victories described above, a number of provisions in the 2020 NBPP will decrease the affordability of coverage and care for families and make it hard for consumers to obtain coverage. Advocates and policymakers can continue to work to address these harms for 2020 and beyond.

Cost-Sharing and Premiums Are Increased

Despite objections from every commenter on this provision — a remarkable unanimous criticism — the final NBPP alters the formula by which the federal government determines the amount of financial assistance provided for premiums made available for income-eligible people. It also adjusts annual maximum out-of-pocket caps on cost-sharing that apply to lower-income consumers, as well as caps that apply to all consumers in comprehensive insurance plans. These changes will increase consumers’ health care costs in 2020 and in years to come.

Until now, HHS adjusted costs annually based on premium increases in employer-sponsored insurance, which fluctuate less than the individual market. Under the new rule, adjustments will be based on premium increases in both the individual and the employer-sponsored market since 2013, before the Affordable Care Act’s major reforms took effect. By HHS’s own estimates, this will result in 70,000 fewer people enrolling in comprehensive health insurance each year, and it will increase premiums by an additional 1% in the coming year. The formula change will increase premiums for a family of four with an income of $80,000 by $204, as the Center on Budget and Policy Priorities explains.

Maximum out-of-pocket costs will also rise for all consumers. Annual caps in 2020 will be $8,150 for individual coverage and $16,300 for family coverage. This means that a consumer with a serious illness will face cost-sharing that is $250 higher in 2020 than it was in 2019 — on top of potentially higher premiums. People with income below 250% of poverty are eligible for cost-sharing assistance that lowers their maximum out-of-pocket costs, but they will also experience an increase in these costs: Maximum out-of-pocket caps for cost-sharing in 2020 will be $2,700 for individuals with income from 100% to 200% of poverty; $6,500 for individuals at 201% to 250% of poverty; and twice those amounts for families.

CALL TO ACTION: Advocates should continue to press for policies that lower health care costs for all consumers, including calling attention to the need for more financial assistance with premiums and cost-sharing.

Navigator Training and Assistance Are Made “Optional” for Post-Enrollment Issues

The final rule eliminates requirements in the federally facilitated marketplaces for Navigators to be trained in various post-enrollment issues and for them to help consumers with those issues. This means that, starting with the next enrollment period, consumers no longer have a guarantee that all Navigators will provide expert help with appeals regarding marketplace eligibility, reconciliation of premium tax credits, use of coverage and rights in health insurance plans, and accessing tax preparers and advisors. HHS says that training in these and related topics will still be available to Navigators who want it, and that providing post-enrollment assistance will be at the discretion of each Navigator entity. This remains a concern for consumer advocates: If training and providing assistance are optional, and if Navigators decide not to provide post-enrollment assistance, who will provide consumers free, unbiased assistance with these issues?

The final rule also eliminates detailed training requirements regarding language assistance, helping consumers with disabilities, and complying with federal non-discrimination laws, such as Section 1557 of the Affordable Care Act. HHS says federal training will continue to address these topics generally.

State-based marketplaces may still require Navigators and assisters to receive more comprehensive training and to provide post-enrollment assistance.

CALL TO ACTION: Advocates and policymakers can continue to press for adequate funding for Navigators and to help Navigators in their own communities obtain training and resources to provide a full array of needed assistance.

Private Web Broker Sites Are Authorized to Display Biased and Concerning Information

The final 2020 NBPP authorizes private “web broker” sites that do not display comprehensive information about all marketplace plans to enroll consumers in coverage through the federal marketplace. The rule permits web brokers to simply link to HealthCare.Gov instead of displaying rate and benefit information for all plans on their own websites. This allows web brokers to promote plans for which they receive compensation while discouraging purchase of those that do not pay them. As a result, consumers must work harder to obtain information about plans that are not lucrative for the web broker. Thus, web brokers’ profit motives can create a biased experience for consumers, who may enroll in health plans that are not in their best interests.

Even more concerning, the final 2020 NBPP rule will allow web brokers and other “direct enrollment entities,” such as insurance company websites, to market non-marketplace plans (such as short-term plans) after consumers select their marketplace plan but before they complete their plan purchase. This increases the possibility that web brokers and insurers authorized by the federal government to act as “direct enrollment entities” will be able to entice consumers into junk coverage through intensive marketing that could confuse and distract them.

CALL TO ACTION: Advocates and policymakers should urge states to address these issues regarding web brokers and other direct enrollment entities and to look out for the interests of consumers who are confused when using these websites.

Comments from consumer advocates made the 2020 NBPP significantly less damaging than it could have been. Advocates and policymakers, particularly at the state level, should keep working to prevent continued harms to coverage and care.