The Trump administration has come out with a 365-page noticethat shows how the U.S. major medical insurance market could lookin 2019 — if that market still exists, if the current laws stay about the same, and if theadministration tries to keep public health insurance exchange programgoing.

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The Centers for Medicare & Medicaid Services (CMS) maps outthe future in a draft set of Affordable Care Act (ACA) benefit and paymentparameters for 2019.

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In the draft notice, CMS officials suggest that agents andbrokers might:

  • Offer plans that are a little leaner than the plans availabletoday.

  • Have an easier time finding policies compatible with healthsavings accounts, and policies based on value-based insurancedesign principles.

  • Face fewer, but tougher, navigators.

  • Have a little bit easier time collecting commissions.

President Donald Trump and Republicans in Congress are trying toreplace the ACA. But CMS officials based the parameters draft onthe statutes now in effect. They assume, as a given, that the ACApublic exchange programs will exist, that the federal governmentwill continue to pay income-based premium tax credit subsidies, andeven that the federal government will continue to make cost-sharing reduction subsidy payments toinsurers.

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CMS officials say in the introduction to the draft that theyhope to shore up the health insurance market by enhancing the roleof states, empowering consumers, reducing unnecessary regulatoryburden on stakeholders, and improving affordability.

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Congress developed the ACA in an effort to help sick people gethealth coverage as easily as healthy people, to provide new healthinsurance subsidies, and to create exchanges, or web-based healthinsurance supermarkets. The ACA drafters wanted the exchanges togive individuals and small employers a quick, easy way to shop forhealth coverage, and to compare plans on an apples-to-applesbasis.

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The exchange system opened for business Oct. 1, 2013. The firstcoverage sold took effect Jan. 1, 2014. The next open enrollmentperiod, for 2018 coverage, is set to start Nov. 1, amidst confusionabout how many issuers will offer plans and what the market ruleswill be.

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"Over time, issuer exits and increasing insurance rates havethreatened the stability of the individual and small groupexchanges in many geographic areas," CMS officials write in theintroduction to the parameters draft.

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CMS is an arm of the U.S. Department of Health and HumanServices (HHS). President Donald Trump issued an executive order inJanuary that calls for the HHS secretary, and other federaldepartment and agency heads, to reduce ACA-related burdens, CMSofficials write.

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"In this proposed rule, we are proposing, within the limitationsof the current statute, to reduce fiscal and regulatory burdensacross different program areas, and to support innovative healthinsurance models," officials say.

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CMS oversees the ACA exchange programs in all 50 states and theDistrict of Columbia. CMS also runs HealthCare.gov, a system thatprovides exchange enrollment and account administration servicesfor residents of 39 states. Some of the proposed parameters in thenew draft would apply in all jurisdictions. Others would apply onlyin the HealthCare.gov states.

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Here's a look at seven highlights from the draft that might beof interest to insurance agents and brokers.

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Continued on next page >>>

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1. What's missing

One of the most important highlights from the new draft is themany topics that CMS leaves out.

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In earlier parameters drafts, for example, CMS set stricttranslation standards for ACA public exchange programs and exchangeplan issuers. The agency established elaborate rules for handlingagents accused of wrongdoing, and it tinkered with the openenrollment period starting dates and ending dates.

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In the new parameters draft, CMS ignores most of the parametersit has already established. It looks, for example, as if the openenrollment period for 2019 could start Nov. 1, 2018, and end Dec.15, 2018.

2. Agents and broker auditors

HealthCare.gov managers have tried to attract agents and brokersby establishing a direct enrollment program that will letHealthCare.gov agents' sell HealthCare.gov plans, with premiumsubsidies, through their own websites, without having to pass theclients over to HealthCare.gov. For 2018, agents and brokersparticipating in that program are supposed to get themselvesaudited by HHS-approved auditors.

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In the new parameters draft, CMS proposes letting agents andbrokers choose any auditor that appears to meet HHS requirements.Would-be auditors that have experience in areas such as health datasecurity compliance may be able to provide the audits withoutgetting approved by HHS. The auditors' employees would still haveto go through annual HHS training programs.

3. Navigators

Navigators are supposed to help consumers understand the ACAexchange system but are not actually supposed to recommend specificplans.

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Some agents and brokers have developed good relationships withlocal navigators. Other producers resent navigators and believethat navigators perform functions that should be performed only bylicensed agents or brokers who have gone through a state insurancelicense screening and testing process and have proper errors andomissions insurance.

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Navigators, for their part, have faced headaches of their own:They got into the exchange business to be helpful, low-key guides,but, now, exchange program managers want them to send in largenumbers of applications. HealthCare.gov managers they have tiedgrants for the 2018 navigators to the navigators' 2017 applicationactivity levels.

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CMS has required each state exchange to have at least twonavigators, with one being a community- and consumer-focusednonprofit group. CMS has also required a navigator to have aphysical presence in the markets it serves.

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In the new parameters draft, CMS says that, starting in 2019, itmay require an exchange to have just one navigator, and that itmight eliminate the requirement that a navigator have a physicalpresence in each market it serves.

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An exchange could still have two or more navigators, and itcould still require navigators to have a physical presence in themarkets served, but that would be up to the exchange managers,officials say.

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A navigator would still have to be able to provide face-to-facehelp for consumers, but it could, for example, provide thatface-to-face help through alliances with other organizations,officials say.

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Continued on next page>>>

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4. Essential health benefits

CMS now requires most exchange plans to cover at least about 60%of the actuarial value of a standard health benefits package, or"essential health benefits package."

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The EHB package includes 10 standard types of benefits, such ashospital care benefits, physician care benefits and prescriptiondrug benefits.

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CMS originally required each state to base its EHB package onthe kinds of benefits a state employee health plan or comparableplan might provide.

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Starting in 2019, CMS might let states choose to tweak their EHBpackages.

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A state could adopt an entire EHB package that was already inuse in 2017 in another state, or it could replace some of its EHBpackage components with benchmark options in use in other states.One state, for example, could keep most of its EHB packagestandards in place but replace the prescription drug benchmark withanother state's prescription drug benefits standard.

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A state could redesign its EHB benchmark plan. If a statedesigned its own EHB benchmark plan, the plan must:

  • "Not have benefits unduly weighted towards" any of the 10categories of benefits in the EHB package.

  • Be equal in scope to the benefits provided under a "typicalemployer plan." (A typical employer plan could be an insured orself-insured group health plan with a total of at least 5,000enrollees in one or more states.)

  • "Provide benefits for diverse segments of the population,including women, children, persons with disabilities and othergroups."

  • Go through a public notice and public comment period. (Stateswould determine what constituted a reasonable public notice andpublic comment process.)

5. Rates

CMS now requires health insurers to justify rate increases over10%.

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CMS has proposed increasing the justification cut-off to15%.

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CMS has also proposed easing the rules for an existing ACAprovision that, in theory, could let a state lower its minimummedical loss ratio (MLR) level, or ratio of health plan claims toplan revenue, to stabilize its market.

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Up till now, no state has tried to change its minimum MLRlevels.

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One possible reason to approve a state's MLR change requestmight be if the change could, possibly, improve consumers' accessto agents and brokers, officials write.

6. Plan types

In the past, HealthCare.gov managers tried to improve consumers'ability to shop for coverage on a true apples-to-apples basis bydeveloping cookie-cutter "standardized option" plan templates, andhaving the standardized option plans come up at the top inHealthCare.gov search results.

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HealthCare.gov also tried to protect consumers against havingtoo many confusing choices by requiring any new plans added toHealthCare.gov to be "meaningfully different" from the plansalready available.

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CMS officials write in the parameters draft that whatHealthCare.gov needs now is more plans and more issuers. Officialshave proposed making HealthCare.gov more flexible by getting rid ofany standardized option requirements or special treatment, and bygetting rid of the meaningful difference rules.

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Officials say they would like comments about how they can addproducts that incorporate value-based insurance design principles,or richer benefits for care that may do more to improve people'shealth and reduce claims costs, and about how they can make iteasier for exchange plan issuers to offer policies that arecompatible with the health savings account program.

7. State-based exchange programs

HealthCare.gov provides enrollment and account administrationservices for five states with state-based exchanges.

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HealthCare.gov charges issuers a 3.5% user fee in states thatrely fully on HealthCare.gov.

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Last year, under former President Barack Obama, CMS proposedcharging issuers in states with state-based exchanges that useHealthCare.gov a user fee of 3%. States complained thatHealthCare.gov user fee rate was too high, and CMS reduced the userfee rate to 2% for 2017.

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Now, CMS is trying to get the HealthCare.gov user fee for thosestates up to 3% for 2019.

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CMS says that, in future, it also hopes to make HealthCare.gov abetter business partner.

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Right now, because of technical limitations, HealthCare.gov hasa hard time letting states choose what services they want, orgetting states detailed activity data, officials say.

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In the future, officials say, they want to give the state-basedexchange programs that use HealthCare.gov more data and moreflexibility.

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Allison Bell

Allison Bell, ThinkAdvisor's insurance editor, previously was LifeHealthPro's health insurance editor. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached at [email protected] or on Twitter at @Think_Allison.