ACA Final Rule Offers States More Flexibility

From Health Plan Weekly

With its newly issued final rule for the Affordable Care Act (ACA) marketplaces, the Trump administration said it aimed to reduce the law’s regulatory burden, return more control to the states and stabilize the exchanges. Yet industry experts don’t expect the rule to have a strong impact beyond offering some additional flexibility.

The final rule changes the regulations surrounding essential health benefits (EHB), the risk adjustment program and the rate review process, among other policy tweaks.

Washington and Lee University Professor Emeritus Tim Jost says the central theme in the rule is the Trump administration’s transfer of more power to the states. “They’re just asking the states to do a lot more in terms of regulation of insurers and stepping back from doing it themselves, and they’re also creating a number of options for states to do things differently than they have done,” he says.

Among the policy tweaks, the most notable one is perhaps allowing states to alter their essential health benefits (EHB) benchmark plan every year, according to Dave Dillon, a fellow of the Society of Actuaries and a principal at Lewis & Ellis Inc.

Some organizations expressed concern about the additional EHB flexibility. For instance, Avalere warned that the flexibility “could lead to less generous benefits and worse access for consumers.”

What concerns America’s Health Insurance Plans the most are some other policies that might further “destabilize and fragment a market already facing uncertainty,” such as expanded hardship exemptions from the individual mandate.

CMS also made several changes to risk adjustment, including incorporating 2016 enrollee-level External Data Gathering Environment data — which reflects the actual experience of individual and small-group market enrollees — into the formula.

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