CMS Finalizes Rules for the Health Insurance Marketplace, Improving Stability

The U.S. Department of Health and Human Services’ Centers for Medicare and Medicaid Services issued the following news release:

The Centers for Medicare & Medicaid Services (CMS) today issued the Notice of Benefit and Payment Parameters final rule and the final Annual Letter to Issuers for 2018, which will further strengthen the Health Insurance Marketplace that millions of Americans rely on for health coverage. The primary focus of the notice — risk stabilization — complements recent announcements that improve the risk pool, including actions to address third party payments of premiums and improve program integrity for special enrollment periods.

“The improvements announced today build upon years of work to implement a Marketplace that is capable of providing high quality, affordable coverage to all Americans no matter their health status, their income, or where they live” said CMS Acting Administrator Andy Slavitt. “The Administration will leave the Marketplace on a stable path that, when fully implemented, will ensure quality coverage is available for all Americans well into the future.”

Over the past few years, CMS has worked with and listened to key stakeholders in order to improve and further stabilize the Marketplace. For instance, last week, CMS announced new requirements ( to improve transparency for patients getting treatment at dialysis facilities paid by third parties and a new pilot on special enrollment periods ( where consumers will have to submit documentation before their enrollment is approved.

In today’s announcement, CMS is creating a next generation risk adjustment model that addresses four specific phenomena. The new risk adjustment model will: (1) account for the number of individuals who had a Marketplace plan for less than 12 months; (2) better account for the risk of high-cost patients; (3) improves compensation for healthier members; and (4) use prescription drug data as another way to account for sicker members. In addition to these modifications to risk adjustment, the final rule and issuer letter contain other provisions to improve the Marketplace consumer experience and strengthen the individual and small group markets as a whole. The policies will give consumers additional tools for assessing and comparing plan networks; broaden availability of this year’s new standardized plan options by accommodating state cost-sharing rules; and create consumer protections for consumers enrolling through the direct enrollment channel.

A fact sheet on the major provisions of the final rule can be found on the CMS website at:

The final rule can be found at:

CMS also made a number of other announcements today, including: Final CMS List of Essential Community Providers for 2018; Issuer Guidance on Uniform Rate Review Timeline and Key Dates for 2017; Final Actuarial Value (AV) Calculator for 2018 and Methodology; Guidance regarding Age Curves and State Reporting; Second-Lowest Cost Silver Plan FAQ and Agent/Broker Compensation and Discriminatory Marketing FAQ.

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