Health & Welfare Plans Newsletter

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[Official Guidance]

Text of HHS Notice of Benefit and Payment Parameters for 2018
294 pages. "This proposed rule sets forth payment parameters and provisions related to the risk adjustment program; cost-sharing parameters and cost-sharing reductions; and user fees for Federally-facilitated Exchanges and State-based Exchanges on the Federal platform. It also provides additional guidance relating to standardized options; qualified health plans; consumer assistance tools; network adequacy; the Small Business Health Options Program [SHOP]; stand-alone dental plans; fair health insurance premiums; guaranteed renewability; the medical loss ratio program; eligibility and enrollment; appeals; and other related topics....

"[To] further promote stable premiums in the individual and small group markets ... we propose updates to better estimate the risk associated with enrollees who are not enrolled for a full 12 months, to use prescription drug data to update the predictive ability of our risk adjustment models, and to establish transfers that will better account for the risk of high-cost enrollees. We propose a number of policies relating to the use of external data gathering environment (EDGE) server data for recalibration of our risk adjustment models, and the use of more recent data for future calibrations. We also propose several amendments to the risk adjustment data validation process, including proposals relating to the review of prescription drug data and the establishment of a discrepancy identification and administrative appeals process....

"[We] propose the premium adjustment percentage for 2018, which is used to set the rate of increase for several parameters detailed in the [ACA], including the maximum annual limitation on cost sharing for 2018. We also propose the maximum annual limitations on cost sharing for the 2018 benefit year for cost-sharing reduction plan variations....

"We also propose to expand the medical loss ratio (MLR) provision allowing issuers to defer reporting of policies newly issued with a full 12 months of experience (rather than policies newly issued and with less than 12 months of experience) in that MLR reporting year, and to limit the total rebate liability payable with respect to a given calendar year. We propose several changes to our guaranteed renewability regulations that would address instances where issuers may inadvertently trigger a 5-year prohibition on re-entering an applicable market....

"In the HHS Notice of Benefit and Payment Parameters for 2017 Final Rule, we established standardized options ... and a categorization of network depth.... For standardized options, we propose four bronze standardized options (including one health savings account-eligible high deductible health plan), and three standardized options at each of the silver, silver cost-sharing reduction variations, and gold metal levels. We propose to select one standardized option at each metal level and one at each cost-sharing reduction plan variation level for use in each State....

"Finally, in this proposed rule, we propose minor adjustments to our rules governing the single risk pool, SHOP, user fees, and notices, including notices related to SHOP, decertification, and appeals."

Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

[Official Guidance]

Text of CMS Draft 2018 Actuarial Value Calculator Methodology (PDF)
27 pages. "The AV Calculator represents an empirical estimate of the AV calculated in a manner that provides a close approximation to the actual average spending by a wide range of consumers in a standard population. This document is meant to detail the specific methodologies used in the AV calculation.... The first part of this document provides background that includes an overview of the regulation that allows HHS to make updates to the AV Calculator as well as the updates that are incorporated into the draft 2018 AV Calculator. The second part of the document provides a detailed description of the development of the standard population and the AV Calculator methodology. The first section details the data and methods used in constructing the continuance tables that are used to calculate AV in combination with the user inputs. The second section describes the AV Calculator interface and the calculation of AV based on the interface and the continuance tables.

The draft 2018 AV Calculator is [available online].... [T]he draft 2018 AV Calculator, when finalized, will not affect any 2017 plans, and will only be applicable for 2018 plans."

Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

CMS Proposes New Standards to Strengthen the Marketplace for 2018
"The rule introduces changes that will make risk adjustment even more effective at pooling risk, allowing issuers to focus on meeting the needs of consumers. First, the rule proposes updates beginning in 2017 to better reflect the risk associated with enrollees who are not enrolled for a full 12 months. Second, beginning in 2018, the rule proposes to use prescription drug utilization data to improve the predictive ability of our risk adjustment models. Third, also beginning in 2018, the rule proposes to establish transfers that will help to better spread the risk of high-cost enrollees, a change that would improve the risk-sharing benefits of the program."

Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

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David Rhett Baker, J.D., Editor and Publisher
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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2016, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of, Inc., or in the case of third party materials, the owner of that content. You may not alter or remove any trademark, copyright or other notice from copies of the content.

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