Federal Government Adopts Rules to Lower Health Care Costs

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Rule lowers consumers' maximum out-of-pocket costs by $400

WASHINGTON, D.C. — The Centers for Medicare & Medicaid Services (CMS) adopted new provisions to lower maximum out-of-pocket costs to consumers by $400, while increasing competition and improving the consumer experience for millions of Americans who will rely on the Federal Health Insurance Marketplaces in plan year 2022. These actions demonstrate a strong commitment by the Biden-Harris Administration to protect and build on the Affordable Care Act (ACA), reduce health care costs, and make our health care system easier to navigate and more equitable.

The second 2022 Notice of Benefit and Payment Parameters final rule (also known as the “2022 payment notice”) includes several provisions to help consumers more easily distinguish between plan options and increase opportunities to qualify for future special enrollment periods (SEPs), when consumers are eligible to enroll in marketplace plans outside annual open enrollment. These SEP policies will offer greater flexibility for those who need coverage—particularly those communities hardest hit by COVID-19. Already, an additional 800,000 Americans have enrolled in the ACA under the SEP enacted by the Administration.

“Families deserve to have access to health care coverage that doesn’t break the bank. That’s why we’re acting to lower consumers’ maximum out-of-pocket costs by $400 and why President Biden has a plan to reduce families’ health care costs for the long run,” said HHS Secretary Xavier Becerra. ” Health care access is personal to me as it is for families across the country. The Department of Health and Human Services is committed to building on the ACA to make sure our health care system is more accessible for every American.”

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“The ACA and the American Rescue Plan offer a lifeline to coverage for millions who might otherwise be uninsured,” said Jeff Wu, CMS acting principal deputy administrator and the deputy director for policy in the CMS Center for Consumer Information & Insurance Oversight. “Those groundbreaking legislative actions are lowering health insurance premiums for millions of Americans, and the regulatory steps we’re taking today build upon those actions. They will ensure that next year, Americans will continue to find affordable, quality coverage through the marketplaces. Consumers and insurers alike will benefit from improvements in the 2022 payment notice.”

The annual payment notice makes regulatory changes in the individual and small group health insurance markets, and outlines parameters and requirements issuers need to design plans and set rates for the upcoming plan year. The notice also includes regulatory standards to help states, the marketplaces, and insurance issuers in the individual and small-group markets better serve consumer needs.

This year, CMS is finalizing the payment notice in multiple phases. The first 2022 payment notice final rule was released in January 2021, as outlined in a fact sheet available at: https://www.cms.gov/newsroom/fact-sheets/notice-benefit-and-payment-parameters-2022-final-rule-fact-sheet. The second 2022 payment notice final rule continues CMS’s trend toward stabilizing the insurance market, promoting program integrity, and reducing regulatory burden.

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For consumers, the second phase of the 2022 payment notice expands options for accessing coverage. It also breaks down barriers—like high costs—that too often have put health care out of reach, particularly in underserved communities. The rule finalizes a maximum annual limitation on cost-sharing that is $400 below what CMS proposed in November 2020.

The new SEP policies, for example, will expand the opportunities consumers have to sign-up for health coverage outside the annual open enrollment period. This includes offering consumers an SEP when they have not received timely notice (and were reasonably unaware) of events that would allow them to qualify, and when they no longer receive employer contributions or government subsidies (such as those provided under the American Rescue Plan Act of 2021) for continued employer health coverage under the Consolidated Omnibus Budget Reconciliation Act (or “COBRA”).

Additionally, revised measures establishing parameters for determining insurance affordability and cost sharing will allow consumers to purchase lower-priced plans. These allow those age 30 and over to apply for catastrophic coverage (coverage that generally offers lower-priced plans to protect someone from high medical costs). The calculations will slow the growth rate for cost-sharing, which might otherwise place an undue burden on sicker and lower-income enrollees, and when adopted by the Internal Revenue Service, will also expand eligibility for tax credits to reduce the cost of health insurance premiums for lower-income enrollees.

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A number of other provisions will make it easier for consumers to comparison shop for plans, as well as improve support for the Federal Health Insurance Marketplaces, health insurance issuers, and other stakeholders who facilitate access to coverage. For further information on provisions in the second 2022 payment notice final rule, consult the fact sheet available at: https://www.cms.gov/newsroom/fact-sheets/notice-benefit-and-payment-parameters-2022-final-rule-part-two-fact-sheet

To view the final rule in its entirety, please visit: https://www.federalregister.gov/public-inspection/2021-09102/patient-protection-and-affordable-care-act-notice-of-benefit-and-payment-parameters-for-2022-and

CMS states it anticipates additional rulemaking for the 2022 payment notice later this year.

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