N.M. Office of Superintendent of Insurance Issues Public Comment on Centers for Medicare & Medicaid Services Proposed Rule

WASHINGTON, Aug. 4 -- New Mexico Superintendent of Insurance Russell Toal, Santa Fe, has issued a public comment on the Centers for Medicare and Medicaid Services proposed rule entitled "Patient Protection and Affordable Care Act: Updating Payment Parameters, Section 1332 Waiver Implementing Regulations, and Improving Health Insurance Markets for 2022 and Beyond Proposed Rule". The comment was posted on July 28, 2021:

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Thank you for the opportunity to provide comments on the Notice of Benefit and Payment Parameters for 2022. As New Mexico's insurance regulator, the New Mexico Office of Superintendent of Insurance (OSI) is focused on making sure that coverage is affordable, consumer protections are rigorously enforced, and insurers are accountable to their members in a competitive marketplace. Our comments reflect the need to meet these critical objectives for those who rely on the Marketplace for their health insurance.

Section 1332 Waivers

OSI supports CMS and the Treasury Department in its efforts to restore Section 1332 Waiver guidelines to match the original intent of the law. It is essential to the stability of the market and consumer confidence in coverage that waivers are not used to create market segmentation or weaken consumer protections.

Extending Open Enrollment Periods

OSI supports the extension of the Open Enrollment Period. SBE states have extended the OEP and realized consistently higher enrollment without evidence of adverse selection. Research shows that family budgets are stretched thin during the holiday season. Extending the window for enrollment could give individuals and families more time to consider their options and improve their financial position. Finally, some individuals who are automatically enrolled in a plan may experience an increase in plan costs due to changes in the Marketplace due to market dynamics. Giving individuals who are automatically enrolled the opportunity to switch to another plan after their first premium payment could help some enroll in a plan in which they are more likely to stay enrolled throughout the year if their previous plan price changed.

Double Billing Requirements

OSI supports the agency's proposal to eliminate the separate billing process for certain services. The current rule is cumbersome and has the potential to cause individuals and families to lose coverage due to confusing and duplicative requirements. We urge the agency to rescind the previous rule and return to the approach that was codified in 2016.

Low-Income Special Enrollment Period

The availability of free, high-value coverage for individuals under 150% FPL changes Marketplace dynamics significantly. After reviewing evidence from other state programs that allow certain populations to enroll throughout the year, OSI has concluded that CMS's proposal will have a positive impact on consumers. The broad Special Enrollment Period running from February 15 to August 15 has boosted Marketplace enrollment substantially and, to our knowledge, has not created significant negative impacts on issuers.

Massachusetts allows individuals who have not received an eligibility determination who make up to 300% FPL to enroll in coverage throughout the year, without any clear signs of adverse selection./1

In combination with the state's enhanced premium subsidies, which now closely resemble the subsidies provided in the American Rescue Plan, Massachusetts has consistently been among the states with the lowest benchmark premiums in the nation./2

CMS's proposal is much more targeted, focusing only on those who are guaranteed to qualify for free Silver coverage.

New York's Basic Health Plan allows those under 200% FPL to enroll throughout the year, with those under 150% FPL paying no premium and those between 150-200% FPL paying a flat fee of $20 per month. According to New York's 2020 Enrollment Report, the average age of BHP enrollees was significantly lower than those enrolled in QHPs, suggesting that the overall risk pool in the market segment enrolled in the BHP is healthier than the QHP market.

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Table: New York BHP and QHP Enrollment by Age (2020)

Source: State of New York, 2020 (https://info.nystateofhealth.ny.gov/sites/default/files/2020%20NY%20State%20of%20Health%20Open%20Enrollment%20Report.pdf)

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The availability of free or low-cost coverage appears to significantly increase the likelihood that younger and healthier individuals will enroll in and maintain coverage. According to an analysis by Families USA in 2018, enrollment among those between 138-200% FPL grew significantly after the BHP was implemented in 2016, even as QHP enrollment among those above 200% FPL remained flat./3

This demonstrates the potential positive effects that year-round enrollment and enhanced financial assistance can have for consumers.

A limited enrollment period suppresses enrollment and increases the rate of uninsured residents in each state. When coverage is truly affordable, the evidence shows that consumers will retain coverage throughout the year. Circumstances in which certain populations can obtain free or very low-cost coverage should be viewed as an opportunity to expand enrollment and reduce barriers to enrollment while minimizing the risk of adverse selection. OSI applauds CMS for making the most of the opportunity that the American Rescue Plan subsidy enhancements present.

Beginning in 2023, some states, including New Mexico, may be interested in creating an "Automatic Retention" program that would automatically enroll individuals who miss premium payments into a free plan until the individual loses eligibility or cancels their plan. This could be especially helpful for individuals who are signed up in a free Silver plan, are auto-renewed into the same plan the next year but owe a premium in 2023 due to changes in the relative pricing of their plan, or who miss premium payments because they do not realize they now owe a premium. "Automatic Retention" would allow a state exchange to enroll these individuals into a free Silver plan so that they do not become uninsured.

According to a recent study, Massachusetts used this process before the ACA was implemented and helped 14% of enrollees stay covered, most of whom were younger and healthier./4

Not only could this approach help avoid disruptions in coverage, it appears that it could also have a positive impact on the risk pool, lowering premiums for unsubsidized enrollees and APTC payments for the federal government. OSI requests guidance in the next NBPP to establish federal parameters for states that wish to implement this type of program.

Navigator Roles

The Office of Superintendent of New Mexico generally supports the proposed rule's reinstatement of the requirement that navigators provide information and assistance with post-enrollment topics. As we have seen, Navigators often become the go-to for consumers in answering questions about insurance. OSI only sees this role continuing to grow as more New Mexicans become eligible for low-cost insurance under the American Rescue Plan and its new affordability programs. OSI's only concern with this proposal is that there is limited funding for Navigators to perform those services. Most navigator organizations train temporary staff in these roles for the open enrollment period. The proposed year-round consumer assistance role would necessitate increased funding for these programs by CMS and states.

We applaud the Biden and Becerra administration for its ongoing efforts to secure affordable health coverage for all Americans. Your consideration of our comments and suggestions herein would be deeply appreciated. Please do not hesitate to call on us any time we may be of assistance.

View table at: https://downloads.regulations.gov/CMS-2021-0113-0196/attachment_1.pdf

Respectfully,

Russell Toal

New Mexico Superintendent of Insurance

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Footnotes:

1/ Center on Budget and Policy Priorities, "Proposed Change to ACA Enrollment Policies Would Boost Insured Rate, Improve Continuity of Coverage." https://www.cbpp.org/research/health/proposed-change-to-aca-enrollment-policies-would-boostinsured-rate-improve

2/ Kaiser Family Foundation, "Marketplace Average Benchmark Premiums, 2014-2021" https://www.kff.org/health-reform/stateindicator/marketplace-average-benchmark-premiums

3/ Families USA, "Innovative Options to Cut Health Insurance Costs by Expanding the Circle of Coverage." https://familiesusa.org/wp-content/uploads/2019/09/NCCI_State-Coverage-Policy-Options-Report_Report.pdf

4/ McIntyre, Adrianna L.; Shepard, Mark; and Wagner, Myles. "Can Automatic Retention Improve Health Insurance Market Outcomes?" https://www.nber.org/system/files/working_papers/w28630/w28630.pdf

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The proposed rule can be viewed at: https://www.regulations.gov/document/CMS-2021-0113-0002

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