March 5, 2020 - SACRAMENTO, Calif. – California Insurance Commissioner Ricardo Lara responded to Trump Administration health insurance proposals contained in its “Notice of Benefit and Payment Parameters for 2021,” the annual modification of federal rules that relate to the Affordable Care Act.

In issuing his letter to the Trump Administration, Commissioner Lara said: “This edition of Trump Administration health rules contains proposals that threaten the stability of health insurance markets, especially for those whose premiums are largely subsidized through health insurance exchanges. I oppose the Trump Administration proposal to change automatic re-enrollment rules in a way that would cancel subsidies for consumers who rely on automatic enrollment. I also oppose proposed changes to rules regarding state selection of mandated health benefits, and urge caution in development of benefit plan designs that, in trying to provide incentives for consumers to obtain selected services, might discriminate against other consumers with other serious health conditions.”

• Commissioner Lara’s letter can be found here.
• The Notice of Benefit and Payment Parameters for 2021 were published in volume 85, number 25 of the Federal Register, beginning on page 7088, on February 6, 2020.
• The Notice of Benefit and Payment Parameters for 2021 sought comment on a proposal to suspend federal subsidies (“advance premium tax credits,” or APTC) for consumers who rely on automatic re-enrollment to continue their existing coverage. The proposal would suspend the subsidy until the consumer took steps to update their subsidy eligibility information.
• The Notice also seeks to impose an intrusive, unnecessary reporting requirement on states regarding state-mandated benefits that are in addition to the essential health benefits required under the Affordable Care Act. Under the Affordable Care Act and all prior federal rules, states have been responsible for making determinations regarding state-mandated benefits.
• The Notice also proposed to implement “value-based” insurance designs to encourage certain consumers to make evidence-based health insurance decisions. Designs that encourage use of certain services for common health conditions must be developed with care, however, to avoid discriminating against those with less common health conditions.