In today’s episode of Regulatory Joe, we’re diving into the world of standard plan options and what new changes will mean for your health plan. 

Standard plans are predefined plan designs established by CMS (Centers for Medicare & Medicaid Services) that carriers are required to include in their portfolio. These plans ensure consistency and equity for members shopping on healthcare.gov. 

Non-standard plans are unique plan designs created by carriers to align with their specific product strategies and market outlooks. 

Both types of plans play a critical role in the health insurance marketplace. Standard plans ensure a level playing field for all carriers, providing members with clear, comparable options, while non-standard plans allow carriers to innovate and tailor their offerings to meet specific market demands and brand positioning. 

Proposed CMS Change 

With members facing upwards of 92 plan options on healthcare.gov, CMS is proposing to reduce the number of non-standard plan options available to consumers. Standard plans would remain mandatory. 

Limiting non-standard plan options is expected to enhance healthcare literacy and simplify decision-making to help members select the best plans for their needs. 

While this change will greatly benefit members, it does pose operational challenges for health plans. Specifically, health plans will encounter hurdles with plan ID crosswalks. It is crucial for carriers to map existing members to new plans to ensure smooth transitions and compliance with CMS requirements. This process is especially critical for plans with numerous non-standard plan options, as they must navigate the complexities of reducing their offerings while maintaining member satisfaction. 

Regulatory Joe’s Recommendations 

• Make appropriate operational adjustments for this change
  • Carefully manage your plan ID crosswalks to ensure mapping of members from existing plans to new ones 
  • Engage with your operations team to strategize the annual renewal process and adjust for reduced plan options 
  • Coordinate with your legal team to understand the implications of plan mapping on your business
    
• Capitalize on new opportunities
  • Explore creative plan designs and unique offerings within these changes. 
  • Consider value-based insurance design programs and other quality improvement strategies 
  • Utilize CMS exceptions for plans catering to members with chronic conditions 
  • Leverage your utilization and care management teams to identify opportunities in your market
    
• Be prepared for implementation
  • Plan thoroughly for the operational execution of these changes to minimize disruptions 
  • Ensure all steps are completed accurately prior to submission to avoid objections and compliance issues 

The push to reduce non-standard plan options moves us towards greater healthcare equity and improved health literacy. While it may present operational challenges for health plans, it also opens the door for innovation and strategic realignment. Health plans will be able to successfully navigate these changes by focusing on member needs and leveraging opportunities presented within the new guidelines. 

Be sure to watch the full episode for a more detailed run-down of changes and recommendations.

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Video Transcript

Hey, everybody. Welcome to Regulatory Joe. I’m Joe Boyle, the president of regulatory solutions here at Penstock, and today we’re going to talk about standard plan options and what that means for your health plan.

We’ll start with the basics. So what are standard plans and nonstandard plans?

Standard plans are plan designs that are put forth by CMS that, generally speaking, carriers will follow and have to offer within their established plan portfolio.

Non-standardized plans are plans that carriers are allowed to create outside of the standard plan designs that CMS offers. This would be driven by a product strategy that an individual health plan has, based on their strategy or outlook into the marketplace.

There’s a lot of reasons why these two types of plans are important. Obviously, the standard plan designs are required for all carriers across the country, specifically entering the individual or on exchange marketplace, to be equitable for members shopping on healthcare.gov.

And nonstandard plan design options are a way for carriers to become more creative in the marketplace by offering plan designs that align more so with their brand, with their cost, position or outlook and roadmap into the marketplace for their members.

So what is being proposed that could change these plan options?

Well, it’s interesting because there’s been a big topic in the industry about healthcare literacy, and a big part of healthcare literacy starts with members shopping and enrolling into a plan.

It’s kind of interesting to think that members who log in to healthcare.gov are posed with 92 options to serve their health care needs across multiple carriers or multiple geographies within their marketplace.

CMS has an initiative to reduce the amount of plan options that are available to consumers to shop for to improve healthcare literacy.

Since CMS standard plans are not going away, limiting the amount of non standardized plan options carriers can offer will limit the amount of choices members will have on a federal marketplace or exchange.

We believe this is actually favorable and for benefit of the member, so that they can make the most informed decision to get the best plan for their health care specific needs.

What this does is cause complexities for health plans who have created a number of non-standardized plan options in years past that now have to deal with limitations on how many plans they can offer.

The focus we’re looking at for the operational execution of this is: you would need to take a really hard look at how you’re completing the plan ID crosswalks this year that get filed with your division of insurance and CMS for a couple of reasons.

One of the most important operational items that we should be looking out for, given the limitations of standard plan options, is completing the plan ID crosswalk. Completing the plan ID crosswalk will be especially challenging for carriers who offered a lot of nonstandard options prior to this year because of how HIOS IDs are mapped. And now we all know that HIOS IDs are used very differently across multiple companies.

But generally speaking, HIOS IDs are used when claims are being issued and paid by a health plan to a member or consumer.

By limiting standardized plan options, health plans need to be very careful about how they’re moving existing membership from plan A to plan B, to make sure that all downstream activities are accounted for appropriately ahead of enrollment, and most especially ahead of the 1/1 effective date.

So there’s really two big items that we need to be looking out for when we reduce the nonstandard plan options. It is the impact to a health plan’s strategy outlook and also the operational execution and how we deliver the changes to the marketplace and to our members.

Another consideration looking into this from CMS’s perspective is when members are posed with over 90 plans to shop for and healthcare.gov, we need to make sure that we’re engaging navigators and assisters appropriately to help members who need it the most, translate the complex information and select the right plan that they need.

There are creative ways for carriers to capitalize on the reduction of the plan offerings by making more unique or creative plan designs, or offering different incentives in other aspects of the plan design for the members, such as creating a value-based insurance design program or another quality improvement strategy.

So that being said, there is some good news with this. CMS will allow certain exceptions for consideration. If a health plan specifically has developed a plan or a portfolio that caters to members with chronic conditions.

Recognizing that it’s not always part of a core health plan strategy to cater to the specific member population, this could be an opportunity for carriers to capitalize on the exceptions rule.

So understanding the rule would be very important. I would recommend you spend some time reading through the policy guidelines and understanding the members that you serve today.

Meet with your utilization and care management team or look to your population health database to say, “are there members experiencing chronic conditions in these geographies were playing in? And is there any opportunity to capitalize on the exception rule?”

This would be a way for carriers to continue to offer the number of plan designs they’re used to offering while still adhering to the new policy legislation.

So when we talk about who will be impacted by this, there’s a couple considerations internal to a health plan. It’s really going to start with your product operations team or your benefit operations team,

whoever’s responsible for actually the strategy of the plan designs establishing your product self on an annual renewal basis. And the team that’s actually responsible for populating the cost shares and copays, generating your highest ideas and maintaining the systems, where this data is housed by CMS.

Second to your operations team, I would definitely engage with your legal team to understand the implications that mapping plans for your members could have on your book of business.

Mapping members can be a very straightforward process when you’re renewing them year over year. But when you’re starting to discontinue the plans and crosswalk your members to net new plans or no plans at all, it can get highly sensitive.

So you want to make sure that you’re completing every step accurately prior to submission to reduce any amount of objections from DOI or from CMS.

I know this topic is pretty complex and causes operational nuances for health plans, but I think it’s important to look at the bigger picture here.

So understanding that the push to reduce nonstandard plan options is to overall increase health care equity for the members that we serve.

Generally speaking, the population that we serve for any ACA book of business is low income. And these members have to ask the question on a monthly basis, “Should I pay my healthcare premium or do I pay my mortgage and to feed my family?”

Reducing the number of nonstandard plan design options now today is going to have a positive impact for years to come, even if it does create operational nuances for health plans.

So by simplifying the plan selections on healthcare.gov for our members, by being mindful of some of the situations that they’re in, financially or not, for an overall push to sustain health equity, we think that this is a positive change by CMS, and we do think that there’s an opportunity for health plans to optimize the performance and the business process of standard plan options inside of their health plan today.

And just to wrap this one up today: standard plan designs and nonstandard plan options are not going away. We’ll definitely be seeing you next year on this one.

But if you do have questions and if you have feedback we’d love to hear from you. Give us a like, give us a share. We’ll see you soon.