Essential benefits, individual mandate & more: 5 changes under HHS' final 2019 Payment Notice Rule

CMS gave states more power to regulate their insurance markets under a final rule published April 9.

Kelly Brantley, vice president at Avalere Health, said, "Given the repeal of the individual mandate and other recent market changes, this year's final [Notice of Benefit and Payment Parameters] provides additional insight into what we can expect in 2019. Going forward, we expect that the administration will continue to focus on granting flexibilities involving essential health benefits, exchange requirements, and benefit design."

Here are five changes under HHS' Notice of Benefit and Payment Parameters for 2019.

1. The 523-page rule will give states more say in what's included in their essential health benefit-benchmark plans. Under the ACA, health plans are required to offer 10 essential health benefits like prescription drugs and maternity and newborn care. The new rule expands the essential health benefits to 50 options, allowing states to "build their own set of benefits" that could become the benchmark plan.

2. The rule also would exempt an individual living in a county with no or one insurer offering coverage on the individual exchanges to forgo the penalty for not being insured this year, The Hill reports. In addition, if the only insurance available covers abortions and the procedure is against an individual's belief, he or she doesn't have to pay the penalty for not buying insurance. Congress repealed the individual mandate beginning in 2019 for everyone.

3. CMS' rule amended medical loss ratio requirements to "reduce regulatory burden in order to stabilize insurance markets, increase insurer participation and expand consumer choice," according to the agency. Medical loss ratio is the percentage of premium revenue a payer allocates toward medical care rather than overhead costs. Under the new rule, CMS will reduce quality improvement activity reporting for insurers. It will also allow states to adjust the medical loss ratio standard for the individual market, if the state can prove a lower standard could help stabilize the market.

4. The final rule will also make it easier for insurers to raise rates in states requiring federal rate approval. CMS widened the default threshold for rate review from 10 percent to 15 percent. 

5. The administration will increase eligibility checks on individuals who receive financial assistance under the ACA, according to The Hill. HHS officials expressed concern some low-income Americans are not accurately reporting their income, particularly in states that haven't expanded Medicaid, to help them qualify for premium tax credits under the ACA.

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