Final Rule Details Provisions Of 2015 Stabilization Programs

Provisions related to the implementation and oversight of the risk adjustment, reinsurance, and risk corridor programs—the premium stabilization programs created by the Patient Protection and Affordable Care Act (ACA)—are detailed in a Centers for Medicare and Medicaid Services (CMS) final rule. The final rule also sets out key payment parameters for the 2015 benefit year. The final rule was published in the March 11 Federal Register.

Under the ACA, qualified individuals and employers may purchase private health insurance through health insurance exchanges. The premium stabilization programs were established by the ACA to “mitigate the potential impact of adverse selection and stabilize the price of health insurance in the individual and small group markets.”

Risk adjustment. The final rule finalizes risk adjustment methodology, updating that set in 2014 and updating it to account for alternative plans for Medicaid expansion in the private market. The final rule also sets the counting methods used to determine small group size for participation in the risk adjustment and risk corridors program.

Reinsurance. Notably, the final rule establishes for 2015 a uniform reinsurance contribution rate of $44 annually per capita. Uniform reinsurance payment parameters for 2015 are also established in the final rule, with a $70,000 attachment point, a $250,000 reinsurance cap, and a 50 percent coinsurance rate. The attachment point for 2014 has also been finalized, decreasing from $60,000 to $45,000. Additionally, the final rule also provides that “if reinsurance contributions collected for a benefit year exceed total requests for reinsurance payments for the benefit year, we will increase the coinsurance rate on our reinsurance payments for that benefit year up to 100 percent, rolling over any remaining funds for use as reinsurance payments for the benefit year.”

Cost-sharing. The final rule sets forth a methodology that helps to estimate the average per capita premium, which will be used to calculate the 2015 premium adjustment percentage and, consequently, the maximum annual limitation for cost sharing and small group health plan deductibles. CMS also sets a reduced maximum annual limitation on cost sharing. The requirement that qualified health plans and plan variations match the out-of-pocket spending of plans that are not essential health benefit plans has been relaxed in the final rule, and the federally-facilitated exchange user rate has been set at 3.5 percent of premium.

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