CMS Gives Insurers Extra Time to File Rates for HealthCare.gov

Late Thursday, CMS issued a guidance giving health insurers an extra 3 weeks to file rates with state regulators for plans they wish to sell in 2018 on HealthCare.gov. The new deadline of September 5, 2017, was first reported by POLITICO.

Insurers and state regulators alike have been unsure what to do about setting 2018 plans under the Affordable Care Act (ACA), due to ongoing uncertainty over the fate of cost-sharing reductions (CSRs) from the federal government. President Donald Trump has threatened to cut off these subsidie, which are critical to affordability for low- and moderate-income Americans who buy coverage on the exchanges. The CSRs are expected to total at least $7 billion in 2018.

Regulators gathered last week in Philadelphia, Pennsylvania, at the summer meeting of the National Association of Insurance Commissioners expressed frustration at the indecision in Washington, DC. Uncertainty over the CSRs, they said, means the problem of figuring out how to fund health coverage for Americans next year will fall to them. Without the subsidies, premiums would have to go up. And the regulators fear more insurers will simply exit the individual market rather than get caught with the liability of not having charged enough premium.

In the Health Affairs Blog, Timothy Jost wrote today, “the ongoing saga of the cost-sharing reductions just got stranger.” CMS, he said, warns that HHS has no more ability than it had before to make cost-sharing payments to insurers. Some state insurance departments have already let insurers build a cushion into silver plan rates to plan for the worst, and the delay to September 5, 2017, is designed to allow others to do so if they wish. What's more, the notice said, CMS plans to make rule adjustments for silver plan rates that account for this.

However, CMS doesn’t say outright that the CSRs are dead. “In other words, HHS may stop reimbursing insurers for reducing cost sharing for low-income consumers at some undetermined point in the future—it has not yet decided,” Jost wrote. “This despite the fact that the ACA requires the payments.”

It is possible that with this guidance, insurers will file rates based on a worst-case scenario or drop out completely and not sign contracts before the September 27, 2017, deadline. This could put more pressure on Congress to repeal the ACA, even though the Trump administration would not technically have withdrawn the subsidies.

A bipartisan group of House members has put forth a plan to stabilize healthcare, which includes bring the cost-sharing reductions under Congressional control and funding them. Meanwhile, in recent days the president has increased the pressure on Senate Majority Leader Mitch McConnell (R-Kentucky) to pass a repeal bill.

All this comes as a Kaiser Family Foundation poll released today finds that 57% of Americans want to see the parties work together to make improvements to the ACA. A majority (78%) think Trump and the administration should try to make the current healthcare law work, while 17% said they should allow the law to fail so it can be replaced later.