ACA Round-Up: Health Plan Filing Deadlines, Affordability Data, Association Health Plan Litigation, And More

Over the past few weeks, the Centers for Medicare and Medicaid Services (CMS) has released new guidance and data related to the Affordable Care Act (ACA). In addition, several pending ACA-related lawsuits have been resolved or delayed. Litigation over a COVID-19 special enrollment period was dismissed, and pending appeals over the association health plan rule, the provider conscience rule, and the double billing rule have been put on hold given new agency leadership. This post summarizes these recent developments.

Recent Guidance From CMS

Filing Timelines For QHPs

On February 2, 2021, CMS posted two final timelines regarding the certification process for qualified health plans (QHPs) offered for plan year 2022. This includes key certification dates for calendar year 2021 and the timeline for rate submissions. Both documents were proposed in early December 2020, and CMS finalized these documents with very few changes.

The QHP application submission window will begin on April 22, with an initial deadline of June 16. CMS will send QHP certification agreements to insurers by September 14, and insurers must return these agreements by September 22. CMS also includes risk adjustment deadlines for 2020 and risk adjustment data validation deadlines for 2019 and 2020. The only clarifications between the proposed and final documents are that insurers must submit marketing data by August 18; marketing URLs must be live and active by September 22. CMS also slightly moved up its anticipated deadlines for displaying QHP quality rating information from November 1 to mid-October.

The rate submission deadlines apply to QHPs sold through the marketplaces and non-QHPs sold outside of the marketplaces in both the individual and small group markets. Insurers in states without an effective rate review program—Oklahoma, Texas, and Wyoming—must submit proposed rates for all single risk pool coverage to CMS by June 4. Insurers in states with an effective rate review program must submit proposed rates to state regulators and CMS no later than July 21.

CMS intends to post the proposed rate filing justifications here on July 30 for all single risk pool coverage. Rate information will be posted regardless of whether there is a rate increase or not. Insurers must finalize HealthCare.gov QHP rate filings by August 18 (instead of August 19, as proposed) and non-QHP rate filings on October 15. Insurers offering QHPs in states with their own marketplace must also submit final rate filings by October 15. States that want to make this information available at an earlier date must notify CMS in writing at least five business days prior to making the information public. Final rate information will be posted no later than November 1.

CMS has not yet issued other final documents for the 2022 plan year, such as the final letter to issuers or the actuarial value calculator or methodology. These draft documents were released in December 2020 and may not be finalized until the remainder of the 2022 payment rule is finalized.

CMS Extends Grandmothered Policies Again

On January 19, CMS extended, yet again, its nonenforcement policy for “grandmothered” or transitional health insurance policies. This policy allows the continuation of plans that were in existence in 2013 and have been renewed since then. Grandmothered plans comply with the ACA’s early market reforms, such as the coverage of preventive services without cost sharing and dependent coverage to age 26. However, these plans do not comply with most of the ACA’s major reforms that went into effect on January 1, 2014. These includes provisions related to community rating, guaranteed issue and renewability, coverage of the essential health benefits package, and the ban on preexisting condition exclusions, among other requirements.

The bulletin allows insurers, so long as states approve, to extend the life of grandmothered policies that begin on or before October 1, 2022 so long as the policies come fully into compliance with the ACA by January 1, 2023. As in previous years, the guidance gives the option of extending the transition for a shorter (but not longer) period and/or applying it to both the small group and individual markets or to either market separately. Insurers must also send a notice to enrollees informing them of the ACA protections that are not available under grandmothered policies and of the opportunity to get ACA-compliant coverage through the marketplaces.

The grandmothered plan policy was initially announced in November 2013 by the Obama administration and has been extended each year since then. Additional background on the rationale for the policy is outlined here, but it was largely adopted in response to political pressure from consumers who were receiving cancellation notices for their 2013 coverage during the first ACA open enrollment period. While the marketplaces have stabilized, this policy did serious damage to the ACA-compliant individual market, leading to large insurer losses in the individual market for 2014 and higher premiums going forward. (CMS discusses this in one of its reports on affordability discussed below.)

Despite this early impact, it is unclear how many consumers remain enrolled in grandmothered policies, and there is likely significant variation by state. As of 2020, grandmothered plans were still permitted in 32 states.

Recent Data and Reports from CMS

The outgoing Trump administration released several new reports and data resources. Two reports focused on the affordability challenges faced by middle-income Americans who purchase coverage in the individual market, with an emphasis on those whose household income is above 400 percent of the federal poverty level and thus do not qualify for ACA subsidies. A third report focuses on the use of direct enrollment (DE) and enhanced direct enrollment (EDE), a Trump administration priority. CMS also released new data on the navigator program and the risk adjustment program.

Affordability Reports

Two recent reports issued in January 2021 outline the affordability challenges faced by many unsubsidized consumers. Affordability challenges are particularly acute for older, middle-income consumers in rural areas. For instance, a 60-year-old earning $50,000 per year—just over the 400 percent income cutoff for ACA subsidies—would pay an average of $12,886 per year in premiums, or about 25.8 percent of their income. This is for premiums only and does not reflect any additional out-of-pocket health care expenses that an enrollee might face, further increasing cost burdens.

One report outlines this type of data and focuses on the financial exposure that older Americans who do not receive ACA subsidies face. The other report discusses the decline in enrollment among unsubsidized individuals as premiums rose. For instance, Iowa, which had the highest premium increase from 2016 to 2019, also had the largest enrollment decline in unsubsidized enrollment. CMS points to coverage losses among the unsubsidized population as a primary reason for the rise in the uninsured rate under the Trump administration.

Report on DE and EDE

The third report summarizes the history of DE and EDE and includes recent data that CMS has touted elsewhere. For 2020, there were about 521,000 plan selections through the EDE pathway. This grew to 1.13 million plan selections during the 2021 open enrollment period and accounted for about 17 percent of all plan selections. (Classic DE accounted for an additional 20 percent of all plan selections, meaning DE and EDE made up a total of 37 percent of enrollment during the 2021 open enrollment period.)

CMS previously suggested that the EDE pathway attracted a higher proportion of new consumers and increased the percentage of returning consumers who made active plan selections during the 2021 open enrollment period. The report puts data behind those assertions and notes that the changes were overwhelmingly driven by the expansion of EDE.

First, the number of new consumers using DE or EDE pathways rose to 865,000 plan selections between the 2020 and 2021 open enrollment periods; this is an increase of 9 percent. All told, the DE pathways accounted for nearly half—46 percent—of enrollment by new consumers, up from 38 percent for 2020. Second, the number of active plan selections made by returning DE consumers increased by 38 percent for 2021. The proportion of returning consumers making active plan selections increased from 71 percent for 2020 to 73 percent for 2021.

The report also highlights how the DE pathways affected consumer timelines for plan selection, showing a more consistent pattern of plan selections throughout the open enrollment period (compared to, say, a surge at the beginning and the end of the open enrollment period). This helped shift overall plan selection to earlier in the open enrollment period relative to prior years.

Navigator Data

On January 19, CMS posted a spreadsheet with new data on the navigator program. Under the ACA, navigators are tasked with educating the public about the ACA, providing fair and impartial information about ACA plans, helping people enroll in marketplace coverage, and providing information in a way that is culturally and linguistically appropriate. Navigators are typically trusted local organizations like United Way affiliates, universities, legal aid societies, and patient advocacy organizations. Regular readers know that the Trump administration cut funding for navigators by 84 percent. In cutting this budget, the Trump administration asserted that navigators failed to reach “enrollment goals” (an assertion that has been criticized).

The spreadsheet released on January 19 provides data for each navigator entity from 2016 through 2019. For each navigator, it includes the number of consumers enrolled in QHPs or Medicaid/CHIP; the number of consumers provided with post-enrollment assistance; the number of consumers who received general help; and the number of consumers who were referred to other health insurance providers (such as Medicare, an insurance department, an insurer, etc.).

Risk Adjustment Data

On January 15, CMS posted an updated summary report of 2017 benefit year risk adjustment data validation adjustments to risk adjustment transfers. The initial report was released in August 2019 but has been updated to correct for a minor misassignment of certain hierarchy condition categories. This update, CMS notes, did not change any of the states or risk pools affected or any outliers for purposes of risk adjustment. But it did slightly change the dollar amounts for the 2017 benefit year RADV adjustments.

CMS also posted additional data in Appendices G and H for the July 2020 report for the 2019 benefit year risk adjustment summary report, as well as the 2020 benefit year risk adjustment model algorithm, which is available here.

ACA Litigation Updates

A post from February 1 provided an update on the status of the many pending ACA-related lawsuits. But there have already been several new developments since then as the Biden administration turns to the courts. These new developments are briefly summarized here.

COVID-19 Special Enrollment Period

On February 3, Chicago voluntarily dismissed its lawsuit, initially filed in June 2020, asking a federal district court in DC to require the government to authorize a special enrollment period due to the COVID-19 crisis. That move was opposed by the Trump administration, which declined to offer a broad enrollment option. Although briefing has long been completed, the lawsuit is no longer needed following the announcement from CMS—as urged in an executive order from President Biden—that it would allow a broad special enrollment period for HealthCare.gov from February 15 to May 15.

Association Health Plan Rule

We have been awaiting a decision from the DC Circuit over the validity of a Trump-era rule to expand association health plans. The district court sided with a coalition of Democratic attorneys general in concluding that the rule violated federal law and was “clearly an end-run around the ACA.” The government appealed that decision to the DC Circuit, which heard oral argument more than one year ago.

On January 28, the Biden administration asked the court to hold the appeal in abeyance, citing the need to consult with new agency leadership. This request was granted by the DC Circuit on February 8, and the parties will have to submit a status report every 60 days beginning on April 9.

Provider Conscience Rule

The last update covered pending litigation before the Second Circuit and the Ninth Circuit. The Biden administration asked each court to hold the appeals in abeyance, citing the need to consult with new leadership. Those requests were granted by the Second Circuit and Ninth Circuit. Oral argument before the Ninth Circuit had been scheduled for February 8 while oral argument before the Second Circuit had been scheduled for March 17. Both were removed from the calendar. The parties must provide each court with a status report on whether the appeal will continue (or not) within 30 days and 60 days for the Second and Ninth Circuits, respectively.

Double Billing Rule

Appeals pending before the Fourth and Ninth Circuits over the Trump administration’s double billing rule—which requires health plans to bill consumers for abortion coverage separately from the bill for all other coverage—have been officially put on hold. The Fourth Circuit had already granted a request from the Biden administration to do so, and the Ninth Circuit did the same in its two pending lawsuits, one from a district court in California and one from a district court in Washington. In the California litigation, the court vacated the briefing schedule but proceedings are stayed only until April 2. In the Washington litigation, status reports are due every 60 days.

Section 1557

There has been additional briefing before the Fifth Circuit in a challenge to the Obama-era rule to implement Section 1557 of the ACA, the law’s primary nondiscrimination provision. Reiterating their need for a permanent injunction, the plaintiffs pointed to a recent district court decision on Section 1557 and President Biden’s executive order on LGBTQ nondiscrimination. In response, the Department of Justice maintained its position that permanent injunctive relief against a potential interpretation of Section 1557 is improper. It also noted that the executive order only directs federal agencies to consider whether to act.

The ACLU, which has been allowed to intervene in the litigation, made similar arguments in response, noting that “the [executive order] is the beginning—not the end—of the regulatory process.” The ACLU filed a separate response regarding the district court decision in North Dakota and asked to file a supplemental letter brief regarding one of the cases cited by the plaintiffs; the Fifth Circuit granted this request.

In separate litigation over the Trump-era rule that is pending in part before a district court in DC, the court scheduled a hearing on February 17 to discuss “whether the change in administrations will have any effect on either side’s position in this litigation.”