Insurers began filing their 2017 qualified health plan (QHP) proposals with the federally facilitated marketplace on April 11, 2016 and will continue to do so through May 11. QHP insurers must submit initial rate tables for 2017 to the Centers for Medicare and Medicaid Services (CMS) by May 11. Single risk pool (ACA compliant individual and small group) insurers in states without effective rate review programs (Alabama, Missouri, Oklahoma, Texas, and Wyoming) must also submit their proposed rates to CMS by May 11.
Single risk pool insurers must file their proposed rates with states with effective rate review programs by July 15, 2016. These rates must be posted publicly by August 1, 2016. Some states may publish proposed rates prior to the August 1 deadline. Final single risk pool rates will become available in public use files on November 1, 2016.
Some insurers are likely to propose significant rate increases for 2017. The reinsurance program, which has reimbursed insurers for high-cost claims, ends in 2016, increasing the cost of expensive claims that must be born by insurers (although the moratorium on the insurance provider fee that Congress adopted for 2017 should reduce insurer costs). Medical trend seems likely to be higher for 2017 and insurers are claiming that they have been drawing a higher-cost population than they expected in the marketplaces. The uncertainty caused by the House lawsuit challenging the cost-sharing reduction program may also drive up premiums.
An Issue Brief released on April 12, 2016 by the HHS Assistant Secretary for Planning and Evaluation (ASPE), however, seeks to put proposed premium increases in context. Premium increases initially proposed for 2016 also looked substantial. The issue brief looks at how much premiums in fact increased for 2016 over 2015.
The brief points out that initial proposed premium increases are not the increases that consumers in fact experience for three reasons. First, proposed rate increases are subject to rate review by state governments, which at least in some cases reduce the actual rate increase requested.
Second, consumer shopping sharply reduces actual premium increases. During the 2016 open enrollment period, 6.4 million individuals (two thirds of Healthcare.gov consumers) selected a new plan. This included 4 million new consumers and 2.4 million (43 percent) of returning consumers. After taking into account shopping, the average premium of Healthcare.gov consumers increased 8 percent, or $30 per month. Consumers who switched plans for 2016 saved $42 per month on average over what they would have paid had they stayed with their 2015 plan. New consumers also chose lower-cost plans.
Third, premium tax credits, received by 85 percent of Healthcare.gov enrollees, are further reducing the actual premium paid by those who receive them. The average monthly tax credit for 2015 is $290 and reduces premiums by 73 percent. After tax credits are applied, the average out-of-pocket premium obligation for marketplace enrollees increased only $4 per month from 2015 to 2016. Nearly seven out of 10 enrollees had an option for coverage of $75 or less in premium and 74 percent had an option of $100 or less. The ASPE report includes state-by-state data on premium savings available to plan switchers and reductions in premiums due to premium tax credits.
Of course, lower-cost plans may have tighter networks, and the lowest premium plan may not be the favored option, particularly for enrollees with established relationships with providers. Options for switching also vary from state to state and county to county, although the ASPE report notes that for 2016 the average county had five insurers and 46 plans available. And individuals who do not receive premium tax credits, including all enrollees off-the-marketplace, will bear the full cost of effectuated premium increases.
A CMS blog post also released on April 12 emphasized the points made by the ASPE report and additionally noted that initial 2014 marketplace premiums were lower than the CBO had predicted in 2010, that current marketplace coverage is better than individual market coverage before the ACA, and that increases in the cost of employer coverage, which covers most Americans, have been lower since the ACA was adopted then they were in the years preceding its enactment.
QHP Review Tools
On April 11, 2016, CMS posted at its REGTAP.info website a set of slides describing updates to the CMS master review and cost sharing review tools. These are automated tools that states can choose whether or not to use to review qualified health plan submissions. These tools can speed up state review, help states indentify additional concerns, and improve the quality of data displayed to consumers.
The automated master review tool imports data provided by insurers. The master review automated tool (and the cost-sharing tool, which imports data from the master review tool) review whether insurers provide at least one silver and gold plan in each market covered by the insurer and whether proposed plans meet the following requirements:
- Annual limits on cost sharing (maximum out of pocket);
- Catastrophic plan requirements (the deductible must equal the maximum out of pocket; three primary care visits and preventive service must be available without cost sharing);
- Formulary review requirements (USP category and class counts, nondiscrimination clinical appropriateness, and nondiscrimination);
- Cost-sharing reduction plan variation requirements;
- Standardized plan design requirements, as found in the 2017 payment rule and letter to issuers;
- Essential community provider standards;
- Meaningful difference requirements;
- Cost sharing nondiscrimination outlier standards; and,
- Provision of a plan ID crosswalk.
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