CMS steers ACA marketplace enrollees toward the Scylla of catastrophic plans and the Charybdis of non-network plans

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Between CMS's Scylla and Charybdis 

There is a throughline in Republican proposals, both legislative and regulatory, to “reform” health insurance, particularly in the ACA marketplace. Consistently, Republicans propose to reduce premiums paid by government and (sometimes) enrollees by

• increasing out-of-pocket exposure;

• narrowing provider networks; and

• increasing risk and uncertainty for enrollees.

CMS’s just-published 2027 Notice of Benefit and Payment Parameters (NBPP) for the ACA marketplace, a multi-part rule published annually, advances these goals on multiple fronts. The NBPP would expand access to catastrophic plans (available only without subsidy); degrade actuarial value in catastrophic and bronze plans by allowing them to add 30% to the highest allowable annual out-of-pocket maximum (to an eye-watering $15,400 per individual in 2027); deliberately draw healthier enrollees into the catastrophic market, worsening the main ACA risk pool; weaken network adequacy requirements; financially penalize states for incorporating their own coverage mandates in Essential Health Benefits (EHBJ) standards; and allow QHP certification of non-network plans.

I want to focus here on the certification of non-network plans, because it is a first swipe at the longstanding Republican goal of directing premium subsidies to plans reminiscent of the pre-ACA marketplace. In this case, CMS proposes to expose marketplace enrollees to out-of-pocket costs with no effective cap and to the balance billing that’s now mostly prohibited against enrollees in minimum essential coverage provided by marketplace or employer-sponsored plans.

How Obama might ditch the individual mandate and save the ACA

The "doc fix" legislation that would replace the current unsustainable physician payment formula for Medicare while transitioning payments away from fee-for-service is a rather remarkable instance of substantive bipartisan cooperation. Republicans and Democrats have agreed on methods of bundling payments and paying for quality that, whatever their merits, would require intensive government monitoring.  Had these methods been incorporated in the Affordable Care Act, Republicans would doubtless be demonizing them as relentlessly as they have the thus-far-dormant Independent Payment Advisory Board for Medicare, notwithstanding that Paul Ryan included a similar board in his 2009 Patients' Choice Act.

The doc fix must be "paid for," however, since the un-implementable cuts to doctors' payments mandated by the law they would replace are incorporated into the federal budget baseline. And in the pay-for, Republicans in both houses of Congress have introduced a poison pill: delay or repeal the Affordable Care Act's individual mandate. That would save money by ensuring that far fewer people enroll in Medicaid or enroll in the ACA's Qualified Health Plans (mostly with federal subsidies). CBO estimates that  the 5-year delay proposed by the House GOP would result 13 million fewer insured Americans by 2018: seven million fewer buying private health plans, five million fewer in Medicaid, and a million eschewing employer-provided insurance.

As written, such a bill would probably destroy the ACA, draining the risk pool and thus inducing insurers to jack up prices. That's assuming no viable replacement for the mandate, however.  In fact the outline of a viable replacement exists, in the ACA "repeal and replace" proposal introduced in the Senate this past February by Senators Coburn, Burr and Hatch.