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Federal Court Vacates Provisions in 2019 Marketplace Rule

A federal court on March 4 vacated several policies in the Trump Administration’s 2019 health insurance marketplace rule for violating federal law.

The vacated policies include:

  • Federal review of network adequacy: The 2019 rule allowed states to review health plans’ compliance with network adequacy standards for plans offered on the federal marketplaces;
  • Standardized options: The 2019 rule discontinued designation of standardized options, which are qualified health plans offering different levels of coverage and price but with a standard cost-sharing structure specified by the Department of Health and Human Services that makes it easier for consumers to compare plans;
  • Income verification requirements: The 2019 rule imposed additional income verification requirements on some individuals seeking a tax credit for their monthly premiums, including providing additional documentation and attestations; and
  • Reducing medical loss ratio rebates: The 2019 rule allowed insurance companies to claim these expenditures without supporting evidence, although the Affordable Care Act (ACA) required health insurance companies to spend 80 percent of premiums on health care rather than administrative costs and required reports on these expenditures.

The federal court found that these provisions violate the Administrative Procedure Act, and the medical loss ratio provision also violated the ACA. These provisions will revert to the previous ACA policy.

Five other provisions challenged in court were kept intact, including elimination of the direct notice requirement, elimination of federal oversight of insurance brokers participating in direct enrollment, modification of navigator selection standards, modification of the Small Business Health Options Program requirements, and curtailing of insurance rate review.

Contact Senior Director of Policy Erin O’Malley at or 202.585.0127 with questions.

About the Author

Julie Kozminski is a senior policy analyst at America's Essential Hospitals.

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