On November 15, 2023, the U.S. Department of Health & Human Services (HHS) issued a proposed rule to update the standards governing Marketplaces and health plans under the Patient Protection & Affordable Care Act (ACA) for the year 2025. Along with the proposed rule, known as the Notice of Benefit & Payment Parameters or informally as the "Payment Rule" or "Payment Notice," HHS also released a fact sheet, a draft 2025 Letter to Issuers, a proposed 2025 Actuarial Value Calculator and methodology, and guidance providing updated numerical parameters for 2025. Stakeholders are invited to submit comments on the proposed rule within 45 days of its publication in the Federal Register, and comments on the Draft Letter to Issuers are due by January 2, 2024.
The proposed 2025 NBPP builds upon the policy priorities of President Biden's administration. It includes various proposals aimed at expanding Marketplace enrollment, enhancing the consumer experience, and raising standards for Marketplace plans nationwide. If finalized, these proposals will generally take effect on January 1, 2025, unless otherwise specified.
This article focuses on market reforms, Marketplace standards, and Advance Premium Tax Credit policies. Another article by Matthew Fiedler delves into HHS' proposals concerning risk adjustment.
Establishing a Federal "Floor" for Health Insurance Marketplaces
Over the past decade, the number of state-based Marketplaces (SBMs) under the ACA has fluctuated, ranging from 15 in 2014 to a low of 12 in the 2017 plan year. Currently, 18 states and D.C. operate an SBM, while the federal government operates 29 Marketplaces, and three states have a Marketplace in partnership with HHS. Georgia and Illinois are expected to transition to an SBM for the 2025 plan year, and several other states are also considering similar transitions. In light of this, the administration proposes several measures to establish minimum national standards for the operation of Marketplaces and the plans they offer.
A Phased Transition
HHS suggests a graduated transition, where a .
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