On January 17, 2019, the Department of Health and Human Services (HHS) released the proposed benefit and payment parameters for qualified health plans (QHPs) for 2020. The rule includes proposed changes to requirements for QHPs, Exchanges, Navigators, and web brokers that offer enrollment in QHPs outside of HealthCare.gov. Highlights of the rule include:

• Proposals that aim to discourage patients from filling brand-name prescriptions when a generic alternative is available;
• Reduced requirements for Navigators;
• An “enhanced” enrollment pathway that would enable web-brokers to enroll individuals and families in QHPs without redirecting to HealthCare.gov; and
• A special enrollment period for households that experience a sudden drop in income mid-year;
• Support from the Administration for formal appropriations of cost-sharing reduction payments from Congress.

Comments on the rule are due Tuesday, February 19, 2019.

Trio of Changes Proposed that Aim to Reduce Prescription Drug Spending, Discourage Use of Co-Pay Coupons

As part of an administration-wide effort to address prescription drug spending, three new changes are being proposed to 2020 that hope to reduce utilization of brand-name drugs once a generic alternative becomes available:

• Allow plans to make mid-year formulary changes to increase cost-sharing or drop coverage of brand-name drugs 60 days after a generic alternative becomes available;
• Allow plans to not count copayments for brand-name drugs towards an individual’s out-of-pocket (OOP) maximum if there is a generic alternative available; and
• Allow plans to not count the value of manufacturer co-pay coupons towards an individual’s OOP maximum if there is a generic alternative available.

The proposals would allow patients to maintain the ability to file exception requests for brand-name drugs. Plans would also be required to provide beneficiaries of notice of any changes at least 60 days in advance.

Administration “Reflects Further” and Backtracks on Some Previous Changes to Navigator Requirements

HHS is proposing to relax the requirements that Navigators operating in states with federally-facilitated Exchanges offer assistance with a number of topics that were not specifically mentioned in the statute and that the assistance was required to be funded by a Navigator grant issued in 2018 or later. Under the proposal, those services would become optional with Navigator grants awarded in 2019 and later. HHS is also proposing to streamline the training requirements to reflect this update.

Some external stakeholders had viewed the additional requirements placed on Navigators in the past couple of years as an effort to reduce the number of Navigators operating within the states.

New “Enhanced” Enrollment Pathway for Non-Exchange Websites

In an effort to broaden options for enrollment in QHPs, HHS is proposing to offer an “enhanced” direct enrollment pathway for web brokers offering access to QHPs separate from HealthCare.gov. The enhanced pathway, if finalized, would allow web brokers to how Exchange eligibility application and enrollment services without redirecting traffic to HealthCare.gov.

External stakeholders have complained that some web brokers steer applicants into short-term plans that do not offer the same coverage levels as QHPs.

Administration Signals Support of Legislative Solution to End “Silver Loading”

The proposal includes language that indicates support from the Administration for a legislative solution to the issue of cost-sharing reduction payments and the resulting “silver loading” that dramatically increases premiums for those plans. Because the cost-sharing reduction payments were never appropriated by Congress, plans are required to offer the reductions with no repayment from the government. The Obama Administration continued to make payments to plans to cover the costs of cost-sharing reduction obligations; the Trump Administration halted those payments in 2017. As a result, many health plans increased the cost of premiums for Silver plans to compensate for the loss of payments from the government, driving up the cost of premium subsidies.

Congress could address the situation by passing legislation that would formally appropriate funds to repay plans for the cost of the cost-sharing reduction mandated by law.

Special Enrollment Period Proposed for Households that are Newly-Eligible for Premium Subsidies Mid-Year

A new special enrollment period, during which time an individual or family would be able to enroll in a QHP, could be added in 2020 that would allow households that experience a drop in household income significant enough that would make the household eligible for premium tax credits, to enroll in a QHP.

Individuals and Families May be Able to Claim 2018 Hardship Exemption Via Taxes, Reducing Burden

In an effort to make it easier for individuals and families to claim a hardship exemption for 2018 (the last year in which the individual mandate is in force), HHS is proposing to allow those exemptions to be filed with tax returns. Currently, individuals and families must seek a separate exemption from the Exchange.

Annual Cost-Sharing Limits Set to Increase in 2020

HHS is proposing to increase the annual cost-sharing limits for individual coverage to $8,200 and family coverage to $16,400 for the 2020 benefit year, an increase of $300 and $600, respectively, from 2019 levels.

HHS Seeks Comments on Automatic Re-Enrollment

HHS is seeking comments from external stakeholders on the current practice of automatic reenrollment for some beneficiaries. The agency notes that there is concern that automatic re-enrollment could make individuals and families less price-sensitive and less likely to ensure that plans moving forward still meet their needs.