Comments on the proposed 2027 Notice of Benefit and Payment Parameters

Matthew Fiedler commented on the proposed 2027 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 several aspects of the proposed rule:

1. Combining the catastrophic and metal-tier risk pools for risk adjustment purposes, as CMS seeks comment on, would improve the risk adjustment system’s ability to meet its goals.
2. CMS proposes to allow insurers to offer bronze plans with out-of-pocket maximums that exceed the statutory limit, with the stated goal of ensuring that it remains feasible to offer a plan with an actuarial value (AV) low enough to qualify for the bronze tier. However, this limit is not currently a barrier to offering bronze plans, and it is unlikely to become a barrier for many years unless CMS changes the AV calculator methodology.

   Moreover, the recent upward trend in the AV of a plan that provides no coverage below the required out-of-pocket maximum—which is what CMS expects to threaten the long-term viability of bronze plans—likely at least partly reflects the AV calculator’s failure to account for prescription drug rebates. Fixing this issue would likely meaningfully reduce reported AVs and their tendency to rise over time; thus, it would offer CMS an alternative path to achieving its stated goal of ensuring the continued viability of bronze plans.

3. CMS proposes to allow insurers to offer plans without a provider network as long as the insurer can demonstrate that enough providers will accept its schedule of allowed amounts as payment in full. If this access requirement can be effectively enforced, it is doubtful that there is much scope for these plans to offer lower premiums than existing plans, in which case this proposal would likely have little effect on market outcomes. If, on the other hand, this requirement cannot be effectively enforced, as seems quite possible, then these plans likely would offer lower premiums and, in turn, reduce federal spending, but at the cost of meaningfully reducing access to care for enrollees who shift into non-network plans, increasing what enrollees who remain in traditional plans pay for their coverage, and perhaps even threatening the continued viability of some traditional plans. In short, if the access requirements work as intended, then this proposal seems likely to be less impactful than CMS hopes, and if these requirements do not work as intended, then the proposal has potentially significant downsides that the proposed rule fails to grapple with.

Read the full comment letter