5 things to know about the final ACA rule for 2019

In a final rule that CMS said would help customers “suffering from high Obamacare premiums,” the agency’s 2019 rule for the Affordable Care Act (ACA) exchanges would give states more power on how plans cover required benefits and widen exemptions to the law’s individual mandate in the final year customers can be penalized for not having ACA-compliant insurance.  

“Until the law changes, we won’t stand idly by as American suffer,” CMS Administrator Seema Verma, MPH, said on a conference call with reporters. “Today’s announcement will offer some relief to Americans who have seen higher premiums and fewer choices since Obamacare was implemented.”

Here are five important aspects of the final rule:

1. Essential health benefits

The final rule gives states more leeway on how they cover the ACA’s 10 essential health benefits, or EHBs: outpatient care, emergency services, hospitalization, maternity care, mental health, prescription drugs, rehabilitation, laboratory services, preventive care and pediatric services.

Beginning in 2020—not 2019, as originally proposed—states would be able to use EHB benchmark plans which other states had used in the 2017 plan year, but all ACA exchange plans would still be required to cover those benefits. Reports that plans would be able to drop whole categories of benefits, such as maternity care, aren’t true, Verma said.

“Essentially what this does is it allows states some more flexibility in establishing the EHBs, but the 10 essential benefits still remain,” she said.

What states could do is adopt another state’s standard for what fulfills the EHB requirements and matches a “typical” employer plan which covers at least 5,000 enrollees, rather than being in equal in scope to the most popular employer plans. There would be some limitations on the substitution being more generous and thus raising federal spending on premium support subsidies.

This proposal had drawn many of the harshest criticisms from hospitals and some insurance groups. Avalere Health said the EHB flexibility “could lead to less generous benefits and worse access to consumers,” while Sen. Patty Murray, D-Washington, the top Democrat on the Senate health committee, said the rule was another attempt by the administration to weaken the ACA through rulemaking.

“With this new rule, President Trump has issued an open invitation for insurance companies to raise premiums, skirt patient protections, and undermine families’ care,” Murray said in a statement.

2. Open enrollment won’t be longer, transitional plans can continue

The first open enrollment period under the Trump administration halved the time Healthcare.gov customers had to pick a plan, which supporters of the ACA said would lead to fewer signups. The 2019 open enrollment period will remain the same length—45 days—beginning November 1, with tighter restrictions on special enrollment periods where customers could be allowed to select plans mid-year.

The rule also further extends transitional, pre-ACA policies, which have been allowed to continue since 2013.

3. Individual mandate exemptions for 2018

The Republican tax cut law passed late in 2017 eliminated the individual mandate beginning in 2019. The final rule adds a number of “hardship exemptions” which could allow more customers to avoid the penalty this year and retroactively for the past two years for a variety of reasons.

Customers could claim an exemption if they live in a county where only one insurer is offering exchange coverage—which, for 2018, was the case in 1,478 counties. It would also exempt customers in areas where no insurer is participating on the ACA exchanges, a circumstance which has yet to occur.

In another, more controversial measure, people could claim an exemption if the plans available on the exchanges cover abortion, which Verma called an important protection for “pro-life Americans and if no other option is affordable for the customer."

CMS officials said there is no set standard for what’s affordable and each exemption will be judged on a case-by-case basis. Verma said the agency didn’t estimate how many people would take advantage of these new exemptions. 

4. Income verification for premium subsidies

CMS said it has seen evidence of people in states that didn’t expand Medicaid overstating their income when their true income was below 100 percent of the federal poverty level—which would make them eligible for Medicaid, not premium subsidies.

The rule will also allow CMS to more easily cut off customers from receiving subsidies when they’ve failed to file a tax return or reconcile subsidies paid in prior years. Those customers would still have to be notified.

5. MLR

In a win for insurance companies, the rule would allow states to more easily modify the 80 percent medical-loss ratio (MLR) standard required by the ACA. If a state can argue a lower standard would help “stabilize the individual market,” then the change would be allowed.  

Insurers also would be able to get out of requirements to track and report expenses on Quality Improvement Activity, or QIA. Instead, they’d be allowed to report a standardized amount “equal to 0.8 percent of the issuer’s earned premium for the year for a minimum of 3 consecutive MLR reporting years without having to separately track such expenses.”