The GetInsured policy team recognizes that understanding health policy can be confusing, but it doesn’t have to be! We plan to break down the most recently proposed health insurance rules from the Centers for Medicare and Medicaid Services (CMS) through a series of several blog posts. Follow along to learn about how these proposed rules could impact you.
On December 12, 2022, the Biden Administration released its proposed 2024 Notice of Benefit and Payment Parameters (NBPP) which would, among other things, expand current “standardized plan” requirements. The 2024 NBPP is open for public comment until January 30th.
Standardized plans offer fixed maximum out-of-pocket value, deductible, co-payments, and coinsurance for select Essential Health Benefit (EHB) services. In addition to decision support tools, which GetInsured offers to our state clients, standard plans are thought to make it easier for consumers to compare plan offerings.
For plan year 2023, CMS began requiring Qualified Health Plan (QHP) carriers operating in Federally Facilitated Exchanges (FFEs) and State-Based Exchanges (SBEs) using the Federal Platform (SBE-FP) to offer standardized plans. The NBPP for 2024 proposes expansions to this requirement. The proposed rule would require all QHP carriers to offer standardized plans for every plan type (HMO, PPO, EPO, etc.) and at every metal level, (except for the non-expanded bronze level) and in every service area the QHP carrier offers non-standard plan options beginning in plan year 2024.
In addition to these changes, CMS is proposing a limit of two non-standard plan options per plan type and metal level, excluding catastrophic, in any service area, which brings standardized plans to the forefront of the shopping experience. The Administration hopes that limiting the number of non-standardized plans will reduce consumer confusion and choice paralysis—many consumers get frustrated and give up before completing the enrollment process because they cannot make meaningful choices and plan comparisons. The Assistant Secretary for Planning and Evaluation (ASPE), Office of Health Policy wrote:
Behavioral economics research shows that consumers make lower-quality decisions when presented with too many choices. This phenomenon has been called ‘choice overload,’ which can be especially concerning when consumers face health insurance enrollment decide not to enroll at all.
As an alternative proposition, CMS has proposed that meaningful standards be applied to the plans being offered. This alternative, however, is more stringent than limiting the number of non-standard plans.
Although State-Based Exchanges (SBEs) are not mandated to impose the standard plan regulations on their carriers, some SBEs do require standard plans to be offered. Out of the 18 SBEs, 11 currently have various requirements for their carriers to offer standard plans. It’s clear that CMS is exploring options to make shopping on Exchanges a more consumer friendly e-commerce experience therefore reducing confusion and increasing the number of enrollments completed.
Choice overload, however, isn’t the only factor that contributes to consumer confusion during plan shopping. Many consumers are unfamiliar with health insurance terminology and can become overwhelmed by the complexity of benefits and costs in a typical health insurance plan. Uncertain, confused, and anxious to make the “right” decision, consumers often settle for plans with the lowest premium even though this may not be the best decision for themselves or their families.
Plan comparison and decision support functionality are the backbone of the GetInsured platform’s plan shopping experience. Unlike other SBE technology platforms that utilize a third-party decision support product, our platform comes out of the box with comprehensive functionality to allow consumers to calculate expected out-of-pocket costs based on their projected health care utilization as well as fully integrated provider search and formulary lookup capabilities.
Through our plan comparison and decision support tool design, GetInsured encourages consumers to take a holistic view of each plan’s cost and benefits structure and make optimal decisions based on their unique health situation and needs. Coupled with clearer plan design, consumers are in a much better position to select a plan that will work for their needs.