Comments on the proposed 2026 Notice of Benefit and Payment Parameters

Matthew Fiedler commented on the proposed 2026 Notice of Benefit and Payment Parameters issued by the Centers for Medicare and Medicaid Services (CMS).¹ The letter makes three main points in response to the proposals and comment solicitations in the proposed rule:

• CMS’ proposal to allow Marketplace enrollees with small premium balances to remain enrolled would increase enrollment, as CMS intends. However, it would have a larger effect if it also applied to binder (initial) payments. CMS appears worried that applying this policy to binder payments would make it easier for unscrupulous brokers to enroll people without their knowledge. This is unlikely, however, because there are already plans that can be enrolled in without a binder payment in most markets.
• Accounting for the time value of money and insolvency risk in risk adjustment would make the program more effective at mitigating selection incentives. CMS could account for the time value of money by scaling up risk adjustment transfers to reflect the interest that issuers that pay into risk adjustment can earn between when claims are paid and when transfers occur. I estimate that an adjustment in this vein would have increased transfers for the 2023 benefit year by 5.6%. The risk that insolvent issuers will default on their risk adjustment liabilities could also be addressed by scaling up transfers; however, if feasible, it might be preferable to require issuers to make interim risk adjustment payments during the benefit year, which could reduce the underlying risk of default.
• CMS’ proposal to create a new risk score factor for receipt of HIV preexposure prophylaxis (PrEP) would reduce issuers’ incentives to limit coverage of PrEP, likely without creating a major risk of overuse. However, if this new factor were applied only when enrollees receive a brand-name version of PrEP (as CMS seeks comment on in the proposed rule), this would create incentives for issuers to limit coverage for generic forms of PrEP. This would increase health care spending without offsetting benefits.

Read the full comment letter here.