In the latest episode of Regulatory Joe, we’re welcoming Jeff Grant—former Deputy Director of Operations at CCIIO and now president of Schedule F Healthcare Strategies—for an insider’s look at the crossroads facing plans on the ACA marketplace in 2026.
From the uncertain future of enhanced premium tax credits (APTCs) to shifting silver loading strategies and the potential re-funding of cost-sharing reductions (CSRs), Jeff unpacks what’s at stake for issuers, regulators and members alike. He also shares real-time insights into CMS workforce changes and policy timelines, the evolving risk pool, and the strategic questions plans must answer now—before the clock runs out.
What’s Next for APTCs and CSR Funding?
The extension—or expiration—of enhanced APTCs remains one of the biggest open questions in 2026. Originally expanded under the American Rescue Plan and extended via the Inflation Reduction Act, these subsidies are set to sunset at the end of 2025.
The potential implications are significant:
- Households above 400% FPL may lose eligibility entirely.
- The under-150% FPL group could lose access to $0 silver plans.
- Member affordability decisions may shift dramatically, with more choosing bronze over silver or gold.
Meanwhile, lawmakers are debating whether to formally fund CSR payments again—something that hasn’t since the Obama administration. Without CSR funding, insurers use silver loading to compensate, inflating the second lowest-cost silver plan and increasing premium tax credits for all enrollees.
This workaround helps plans offset CSR losses, but it also skews plan design and enrollment behavior, driving more members towards high-value silver plans and increasing overall risk pool volatility.
According to Jeff, this practice could cost the federal government an estimated $29 billion over 10 years, turning an intended cost-saving policy into a long-term expense.
Rate Setting Strategy in a Year of Uncertainty
Issuers are currently juggling three potential scenarios for 2026 rate filings:
- Full APTC extension
- Partial extension or recalibration
- Expiration of enhanced subsidies altogether
With the final congressional decision possibly arriving after August—and a new actuarial value (AV) calculator already disrupting plan designs—issuers are filing, re-filing and preparing for rework well into fall.
This level of uncertainty has many plans modeling multiple portfolios and filing strategies, all while navigating shifting enrollment trends and anticipating additional changes during the final months of the filing season.
Enrollment Behavior and Member Affordability
If enhanced APTCs expire, affordability will shift dramatically—particularly for households under 150% FPL and above 400% FPL. Enrollees may be pushed from silver to bronze or exit the marketplace altogether. Combined with the proposed $5 minimum premium and loss of $0 premium auto-renewals, these changes create new friction points for consumers.
With 80% of healthcare.gov enrollments assisted by agents or brokers, these professionals will shoulder much of the responsibility in 2026, especially as they work to re-engage members impacted by disappearing $0 premium plans and a compressed enrollment timeline.
ICHRA’s Potential to Shift the Coverage Landscape
Looking ahead, Jeff notes potential for Individual Coverage HRAs (ICHRAs) to reshape how coverage is delivered, especially if Congress enables more seamless integration with ACA enrollment systems.
While major shifts in 2026 may be unlikely due to timing, ICHRAs could eventually blur the lines between group and individual coverage. Carriers should be tracking this evolving model as part of long-term strategy.
What Health Plans Should Be Doing Now
As 2026 approaches, plans should be proactively preparing for multiple potential scenarios. While many key policy decisions remain unsettled, there are immediate steps issuers can take to stay ahead:
- Model for all three APTC scenarios: Full extension, partial continuation or expiration should each have a corresponding rate and plan strategy.
- Track CSR funding discussions: A change in funding could drastically alter silver plan pricing and subsidy distribution.
- Prepare operationally for rework:Build in flexibility to adjust plan designs, rates and portfolios well into fall.
- Monitor member behavior trends:Understand how affordability shifts could impact enrollment and risk pool composition.
- Evaluate ICHRA market signals: Start mapping potential employer strategies that may influence your individual market share.
Whether subsidies are extended, recalibrated, or allowed to expire, the impact on member affordability, enrollment strategy, and rate setting will be significant. As Jeff explains, health plans need to stay flexible, monitor policy movement closely, and prepare for rapid adaptation.
VIDEO TRANSCRIPT
Joe: Hey everybody. Welcome to Regulatory Joe. I’m Joe Boyle, and today I’m delighted to introduce our newest guest, Mr. Jeffrey Grant. Jeffrey is the former Deputy Director of Operations at CCIIO and has now started his new journey as president and founder of Schedule F Consulting.
Jeff: Hi. I’m Jeff Grant, I used to direct operations at the Center for Consumer Information and Insurance Oversight, where the largest operation was the federally facilitated marketplace. And then overseeing the operations also of what happens in state-based marketplaces for ACA coverage around the country.
Joe: Thank you Mr. Grant. And thank you for your public service and for joining us today. So I know that you’ve also started in your second journey post-CMS, Schedule F Consulting. Could you tell us a little bit about that?
Jeff: Yes, we are a general consulting firm that will work in the areas of ACA or Medicare Advantage coverage, working with health plans. We work with regulators. We can work with agents and brokers. We can also work with the government contracting community on managing their relationships with the government as they try to administer Medicare, Medicaid, and marketplace for CMS.
Joe: As you’ve navigated from CMS into your consulting venture, I know you’ve spent a lot of time with advocacy with CMS. What are some of the things you’re seeing as hot topics?
Jeff: So I do think the big legislative items are gonna be how they deal with the enhanced premium tax credits, and then the decision to fund or not to fund the cost-sharing reductions, the CSRs. So I’ll take these a little bit in reverse order. The cost sharing reductions has long been discussed.
Jeff: It was considered appropriated funds under the Obama administration. In the first year of the Trump administration, there was a decision by the attorney general that these were not appropriated funds and so that the government could not fund cost sharing reductions that the plans were required to give, that did not change the obligation of a plan to provide the cost sharing reductions.
Jeff: So the way that, uh, plans have chosen to fund cost sharing reductions and regulators have allowed this in their states is what is called silver loading. And that is to shift the cost of the cost-sharing reductions from something that would’ve been funded by the government to baking it into the plans rates and ultimately the premiums that people pay.
Jeff: And this is because plans are still required to provide cost sharing reductions to people that are eligible for them. And that takes a 70% silver plan to either 73, 87 or 94% actuarial value. And so if you’re giving somebody 94% actuarial value, you have to make up that additional 24% because the government is no longer going to pay you for that. And so people have loaded that onto their silver plan rates. Now, the reason this matters is because it gets to the tax credits. So the premium tax credit is calculated based on the second lowest cost silver plan. You really have got people when they’re silver loading, once they’ve raised that premium up, you’re really getting an average of about a 90% actuarial value probably in these silver plans. You got a bunch of people on 87 and a bunch of people on 94. Hardly anybody’s gonna sign up for a plan that has had its rate raised that much with the silver loading for a 70% or a 73% plan. So what you’re getting is a bunch of people in 94% and 87% coverage and probably tilting toward 94% under the enhanced tax credits.
Jeff: So you’ve got, uh, you know, a very heavily weighted premium at that point in time. What that does then is raises the basis of the calculation of how much premium tax credit everyone gets, not just the people who are eligible for cost sharing reductions. So having passed that cost over, now that cost gets passed across everybody’s premium tax credit and raises massively the amount the federal government is expending in premium tax credits.
Jeff: Brian Blase at Paragon has a study out that says it’s about $29 billion over 10 years that the government is gonna spend additionally because of not funding CSRs.
Jeff: So people thought of CSRs as a cost savings. It’s actually a coster to the government. So there’s an active discussion now among the majority in the House and Senate that they may wish to fund CSRs, which would bring 29 billion back to be able to be used on discretionary spending. And that’s an important number.
Jeff: I think this one we should expect to see by the way. That will have a compressing effect. On the silver plan rates make a 70% plan maybe more affordable for people. So that would have a positive outcome. For folks that are shopping on the lower end silver plans, it obviously reduces everybody’s tax credit though.
Jeff: So that will have a different kind of effect on the purchases of other plans than how people decide to purchase coverage. So you may have much less gold coverage purchased and a lot more bronze coverage if people really want to get the most out of their tax credit from a premium perspective.
Jeff: So it’s really a change in the affordability. But that also opens up the opportunity to be able to spend this, uh, money that has come back to the government. And this brings us to the second big question of the year, which is the expanded premium tax credits.
Jeff: So under the American Rescue Plan Act, and then, uh.
Jeff: The tax credits were expanded. They were expanded just for 2021 and then they were lengthened out under the inflation reduction act to cover folks all the way until 2025. So, with the start of plan year 2026, there is currently uncertainty as to whether those enhanced tax credits will be continued.
Jeff: I think the most important notes, it’s, it’s more generous for everyone, but there’s a couple of populations that are particularly noteworthy. Uh, one is the over 400% population. So it used to be that there was, what you would characterize a cliff at 400% of the federal poverty line, you stopped getting tax credits.
Jeff: So you would have this huge cliff if you were at 401% FPL, then you would have no tax credit available to you and you would pay the full cost of the premium. That was quite a large cliff in some states.
Joe: Most certainly so, and also especially because that’s based on total household income for APTCs.
Joe: When a member is filling out their eligibility and enrollment application, November 1st this year, not to mention with the prospective shortening of enrollment to December from January. So as they put in their household income, you’re saying, so above that 400% that Cliff eligibility requirements are going to stay the same.
Joe: So you’re getting the same member who their salary or their income may not have changed, who could potentially be working multiple part-time jobs, trying to make a decision, do I pay my mortgage this month or do I pay my health insurance premium? Those folks may not be eligible for APTCs when they were expecting that, uh, subsidized support.
Jeff: And then I think the other group is the under 150 population, which under the original construct would always have to pay a little bit, even if they wanted to join a 94% silver plan.
Jeff: So they get the most generous silver plan if they’re under 150% FPL. And that population would go back to having a modest premium, which when you’re under 150% FPL, that’s a whole different kind of ball game in terms of how much available money you have.
Jeff: That can be the kind of thing that causes you not to purchase silver coverage and buy down to free bronze coverage. Because you would still see free bronze plans available for that population, but you would cease to have any free silver plans available.
Jeff: So that kind of change will impact the buying decisions of that population probably fairly dramatically.
Joe: Quite significantly, I’d have to imagine. And also, uh, from where I sit, we’ve seen issuers drastically change their plan portfolio strategies and how they’re developing their plans, adding new plans, discontinuing existing plans or withdrawing portfolios where they think they will either lose membership, gain membership or have significant shifts across products.
Joe: And the important piece about this is wrapped around both the two topics you just described and discussed. CSR Silver Loading and Advanced Premium Tax Credits is CMS also re-released a new version of the actuarial value calculator. So even after plans had finalized their proposed product shelf at the end of January, they were just quickly thrusted back into redesigning and rerunning the calculations of all their plan designs, now flowing up into filing and submission season.
Joe: So what we’re seeing right now, Mr. Grant, is issuers, um, in a way scrambling not to complete one, not two, but up to three rate filings for one single plan year to combat extension of APTCs, non-extension of APTCs or a third option, will they be extended for a partial amount of time and then redecided at a later point?
Joe: Right now, we’re finishing the upstream implementation of all the change, but we’re still also making filing and submission decisions. Even though this federal rule hasn’t been codified. I would even expect additional change or rework, based on these portfolios, probably between August and November.
Joe: How would you envision ultimate barriers to enrollment will be handled by carriers this year?
Jeff: First of all, I think the the scenarios as I see it, I would say there’s extension of the full range of tax credits, which there’s arguments to be made that the Republicans might choose to do that using some of the CSR money recovered for a one year extension with midterm elections coming up, that that might be seen to be a good political move.
Jeff: I’m not sure whether they can get the full caucus on it. And depending on the nature of the spending bill, they may need the entire Republican caucus if they have other things in there that Democrats won’t vote for.
Jeff: If they can put a spending bill forward that Democrats will join, then they don’t need the full Republican caucus, but they still have the majority of the majority condition.
Jeff: So you need more than half the Republicans to support a full extension. And I think a lot of Republicans struggle with aspects of the enhanced tax credits, the other one is just not doing it at all. That has a pretty big downside because the people that most benefit from this tend to be in Republican states, especially 100 to 150 population that I mentioned where you’d have a non-expansion state.
Jeff: That’s a huge population and that is all Republican states that are non expansion states. So I think that’s a challenge for the Republican caucus. The other thing they could do is recalculate these things. They could decide they wanna just clip it at 400% and they could try to refactor these things. All of these require going back and forth between congressional budget office and Congress to figure out what they’re, they’re getting to there.
Jeff: And this would be in the context of an overall large spending package that will probably have a lot of controversial elements to it that will be very challenging to get through. So I think the first question is, can they actually make those kind of adjustments? Because I think that would be the ideal spot for the Republican caucus is some form of adjustments to the enhanced tax credits.
Jeff: But there’s a lot of work going on, on a lot of other subjects and this might end up getting crowded out as not the highest priority. So they will have to really make this a priority to get it done. In terms of issuers, yeah, I think they all, first of all, they have to be thinking about all these scenarios.
Jeff: And at a certain point you’re gonna run out of runway. So I think you can’t go right up to November and be changing rates. I think CMS has shown a great deal of flexibility when there are significant rate changing alterations that happen. But I think we’re looking at something that ideally would be done by Congress before they go off for August recess.
Jeff: If they push it up to October 1st, I think it’s gonna be super challenging for CMS to allow any changes to rates. So they, um, they may be sitting with a set of rates that is not ideally positioned for whatever Congress has acted to do.
Joe: Well stated. And I will say it’s interesting because we’ve worked with some states to already in this calendar year where we’ve already submitted, not rates, but form filings, uh, which already dictate certain levels of benefits that states are starting to review.
Joe: So leading up to, like you mentioned, so August, September, October, it’s going to cause a lot of constraints for, for all parties and ultimately impacting the member, which is the focus, and really the focus of what we need to all be looking at.
Joe: When you talk about the Republican caucus and having the majority ruling in favor of or against certain decisions, I quantify that similarly to how I’m seeing states considering transitioning from federal marketplace or FFM states to become an SBM.
Joe: For example, using the state of Massachusetts as an example, has allowed them to retain just a little bit more control over the CSR or silver loading process as they issue their net new requirements.
Joe: Do you see that having states being state marketplaces or federal marketplaces has a drastic difference between the decisions that need to be made or influencing one way or another, or that it’s not really impactful based on what marketplace type you are?
Jeff: I don’t think the key is necessarily marketplace type because I believe the insurance regulators in the states have a big say over what they allow and state insurance law as well. There may be legislation that constrains folks in the states. The feds have never leaned into this, so I would say if a state wanted to, lean into it, they can lean into it regardless of whether they run their own marketplace and they have.
Jeff: So there is not a consistency across the federally facilitated marketplace in how every state regulator looks at these issues. And there’s, you know, do you do broad loading where you load it across all plans, or do you do specific silver loading and stuff? That is still up to the regulators to do, so I don’t think it really matters that you run a state-based marketplace. You may be a little more focused on the impact that it has in your state market, but I’m not gonna suggest that regulators that work in the federal marketplace aren’t completely focused on the ACA plans in their market.
Jeff: They’re quite aware of what’s going on in their markets. When I was at CMS, we didn’t note a big difference between talking to a state that ran their own marketplace and the very involved regulators in the states where we were running the marketplace. In fact, they were very actively engaged in, issues about how we ran our marketplace.
Jeff: So I think that will continue to be true.
Joe: That’s comforting to hear. Especially because I know that when we talk about this in the delivery of submitting plans, serving our members, and then also reviewing plans. Essentially making sure that any state-based marketplace actually has the access to the resources to ingest and make certain decisions with CMS behind them.
Joe: As these decisions are being codified and put in force, that state-based marketplaces can actually manage the influx or manage the implementation of changes, making sure reviews happen timely, because from a federal perspective, I have to assume the FFM marketplaces may be able to administer a little bit more quickly than the SBMs.
Joe: So serving those members within the state, making sure they have enrolled coverage at the right level of premium.
Joe: When we’re in receipt of objections from states, we’re also anticipating a higher level of objections from both CMS and state regulators on plans that are submitted.
Joe: So identifying new trends for rework and downtime. I think there’s gonna be a lot of lessons learned this year as well.
Jeff: I would agree that the federally facilitated marketplace at times has been able to move more quickly when it is a regulation issue. So it is something that CMS itself is issuing, and before there is a final rule, you can’t share where the final rule’s going to end up.
Jeff: And, you know, sometimes last minute changes happen in final clearance on a final rule. So you really cannot tell anybody where the rule’s going until the rule’s been issued. So the state-based marketplaces are always waiting, and yet while we are, are clearing a rule, CMS has more clarity as to what’s gonna happen and maybe a little more prepared on the FFM side to, to make adjustments as necessary.
Jeff: I think what we’re talking here is legislation. So CMS has no more knowledge than any other state in where congress will ultimately take this. So we will all be watching the spending bills and every state has a delegation that we’ll probably be watching these very closely to see what happens and to see where they go on both CSRs and tax credits. And then if you’re a state-based marketplace, you may have the capability to, to give allowances that we would not be allowed to give as the Federal marketplace when you’re trying to manage as many states as a federally facilitated marketplace would be managing. So there were times that states were able to do things that we could not accommodate.
Jeff: There’s other states that are much more limited. Their platform might not be as flexible. So I think you would get a mixed bag in the states.
Jeff: In terms of what they’re able to do, though, I imagine most of them will be trying to plan for multiple scenarios and watching closely and working with their issuers to do the best they can to get the best set of plans and rates on their exchanges by the start of open enrollment.
Joe: Well said and, and well articulated too. What are your thoughts and what do you think will occur probably closer to enrollment in as it relates to the diversification of plans product portfolio? Meaning are we gonna see excess of membership driving towards ICHRA, other funded product types? Are we going to see this drive members to different carriers or even outside of the ACA coverage entirely or even withdraw from coverage? So what are your thoughts on member behaviors and carrier development of new strategies?
Jeff: Well, so I think it is quite possible that you’ll see congressional action in the ICHRA space to modify some of the restrictions that exist right now that limit, in my opinion, at least, the market penetration on ACA plans. I think one change might be to allow cafeteria plans to come into the exchange and enroll. That would facilitate a lot, I think, for some of the folks that try to work both the ICHRA market and then the ACA market, especially if you’re using, well, if you’re using an enhanced direct enrollment platform, you’re kind of having to go back and forth between one part of a website and another part if you’re using an EDE platform to go over to the ICHRA coverage if you can’t do it through qualified health plans.
Jeff: But I think there will be an interest in, in a shift towards ICHRA potentially. I think the APTC decision is going to be late enough in the game that I’m not sure employers will be nimble enough to move. And so it’ll be interesting to see if employer behavior changes, and again, it’s not clear out of this, you know, 24 to 25 million people that are currently covered, how many of those people would have an employer want to jump in and get back into some kind of coverage or get into coverage for the first time using an ICHRA model? It is possible. I’ve always kind of thought of the ICHRA model as shifting the employer coverage landscape, not necessarily the individual market landscape.
Jeff: And so, for the individual market, I think you will see coverage go massively down. If you have the elimination of this, you’ll lose most of the over 400% people. They won’t be able to afford premiums in many states. And then you’ll see some shifting between plans and it’ll really come down to an affordable, the decision for each person.
Jeff: And I think you will see a risk pool change, a significant risk pool change because the folks that will stay around are the sick people where they feel like they need the coverage and those that don’t feel like they need the coverage. So they either have a minor inexpensive condition or they have no conditions whatsoever.
Jeff: Those were the people that will abandon coverage more quickly, I think. And then if you compound that, you know, we have the, the proposed rule out there too, which, if implemented as proposed, that will also change things. So it, it wasn’t the bulk of enrollment that came in in the final month, it was really a trickle compared to what happens during open enrollment.
Jeff: But you will have, with a shortening of the open enrollment period across all the states, you will see a reduction in the number of people enrolled, a modest reduction. But I think with all the other provisions, particularly you can’t roll over zero premium coverage that you’ll have, a modest premium to pay if it’s, if it’s finalized as a $5 premium. The $5 premium itself isn’t, necessarily a barrier to coverage.
Jeff: But it could be something that trips people up, they don’t know they’ve got a $5 premium or they just didn’t expect to have to pay and refuse to pay it and drop out of coverage. And last year that was 30% of people in the federally facilitated marketplace were auto renewed. And a decent percentage of those will have free premiums.
Jeff: So that’s kind of higher than it’s been in the past. And then I think you will see the states were something like 70% from what I’ve heard. I haven’t confirmed that number, but others have reported a number of like 70% for the states. So I think there’s some challenges there, and the states are gonna have to do a lot of work on the zero premium people when that comes up for them. I think they have maybe an extra year on that provision.
Joe: Well, that’ll be interesting because, so to your exact point, so not just complications with what you mentioned, risk pool, but then also grace period enrollment. So if they miss that $5 premium, whether they don’t understand they’re required to pay it or they don’t want to pay it simply, they’ll get what? One month you’ll have to pay second month catch up. And if you don’t pay that $15 by month three, you’ll be boomeranged out of your coverage. Now, even to your point about enrollment through healthcare.gov, I would love to see a future where there’s one single pipeline for both DE or EDE, regardless if its companies, you know, administering enrollment and billing.
Joe: If we had ICHRA where a member could actually choose through one portal, actually go to one single place, choose a plan that’s best fit for them within the right affordability schedule that they can afford in my book, that’s the path of least resistance and also would support CMS’s original thought leadership around healthcare literacy.
Joe: Even simplifying plan selection where CMS, we’ve reduced the number of plan options where a member would log into healthcare.gov and be posed with what? Over 100 or 115 plan designs choose from.
Joe: Yes, there are navigators, yes, there are enrollment specialists, but having that pipeline, it really starts it with that process. So I know we’ve simplified the plans down to, I think members will see just in the high eighties, low nineties worth of plans, we’ve crosswalked and mapped membership appropriately. I really hope this year does not unwind some of the, uh, positive improvements that we’ve induced, operationally speaking. So even though it’s more of a strategic shift, I see large impact to tactics and being able to execute regardless of the outcome of the decision from Congress. So now I’m glad you mentioned that.
Joe: That’s a, that’s a really good point.
Jeff: And I’ll remind you that 80% of healthcare.gov enrollments that are active enrollments, come with the assistance of an agent or broker. So there is a very high level of assisted enrollment where a lot of times probably somebody isn’t sifting through 80 or 90 plans and they’re, you know, with a good agent, they’re having an informed discussion about the plan choices available.
Jeff: And there’s a lot of folks out there trying to help agents get better at this. I do think agents and brokers themselves have a lot of work cut out for themselves. They have benefited from the free auto-renewals. So the zero premium plan auto renewals are going away and they’re gonna have a lot of work cut out for them just to get in touch with those people even in January.
Jeff: And I, and one point I will make is they only really, if they’re entitled, I will say if they’re entitled to a zero premium plan, they only get one $5 premium bill. And then they can come in, update their application, verify their income and not change their plan enrollment because they don’t get a special enrollment period.
Jeff: But if they are truly eligible for a $0 premium, they can get that reset to $0. They do still need to pay the $5. They can’t let that lapse. If it lapses after 90 days, they will still have their coverage terminated back to the 30th day. So they still need to pay that premium within the first 90 days, but they can get it back to zero if they’re truly entitled to a zero premium plan.
Joe: So in what you just described, I mean to, to us, I understand the flow of events, but to, let’s just say, your traditional operational analyst at a health plan, are they going to understand how to administer that flow of events? Step one, step two, and step three.
Joe: What are your thoughts on some of the smaller carriers or regional players?
Joe: Do you see new issuers entering the marketplace as a competitive advantage or an opportunity? Do you see large scale shifts somewhere in between, or just the current pool of issuers maintaining their business process to the best of their ability?
Jeff: I think the latter is probably the most likely place to end up. I don’t think when there’s this much uncertainty about what’s gonna happen with tax credits, CSRs and such. I don’t think it’s an ideal time for somebody to try to jump into the market. It’s always hard to price when there’s a lot of uncertainty in the market about not just what the rules are gonna be, but what that those rules will do to the risk pool.
Jeff: And then the folks that are in will have to be certainly nimble and think very carefully about what the expected change would be to a risk pool in any given policy scenario and what that should mean for their own rate settings. So I think we’ve never seen yet a, a decrease in marketplace coverage.
Jeff: And so if we saw a massive, you know, 20% loss in coverage and that kind of centering on the healthier people leaving, I think it will be back to maybe not 2014 levels of uncertainty,
Jeff: but probably the most uncertain rate setting year issuers have faced in a long time, which is again, not the time to enter the market.
Jeff: I think you want to see what happens, see what Congress does, see whatever set of subsidies ends up out there, and then kind of see what that does to the risk pool, and then make your decision to enter or not to enter the market based on how you see things shaking out.
Joe: Great. No, and that’s helpful too. If you could tell me a little bit about your thought leadership behind the difference of the impact to HCC model risk adjustment for commercial plans, and if there’s any future change that you could foresee for Med Advantage, what does that look like?
Jeff: Both Medicare Advantage and the ACA risk adjustment models base are the HCC models. So, I was on the ground floor of implementing Medicare Advantage Risk Adjustment when we decided to go with the HCC model. And then I was on the center of the design process of the ACA risk adjustment and led that process.
Jeff: And again, we made a selection to go with the HCC model, but it’s a very different model. There are different factors to consider in it, um, and the entire risk adjustment process is quite different. So the two models are managed separately.
Jeff: CSRs themselves factor into the model, but it, whether they’re funded or not, is kind of outside the scope of the model as are APTCs because the source of funding of premiums isn’t really what’s of concern to the model.
Jeff: It’s a cost predictive model. So it’s looking at what your disease conditions might be and what your projected costs would be, and it is supposed to account for, you know, the additional generosity of a 94% plan versus a base 70% plan versus a 60% bronze plan and, and how the cost profiles in those different scenarios work out for folks. So I think the models themselves should be fine no matter what happens here. Now in MA I’m not sure that there’s as much focus on the modeling as on the coding. So there is a great concern by Dr. Oz, who is a big fan of MA but is, he’s concerned about the, the cost of MA beneficiaries compared to traditional Medicare beneficiaries, which is now estimated to be 10, 15% above traditional Medicare.
Jeff: So I think he is concerned about coding practice. The interesting thing is in the ACA markets, if everybody uses the same coding practices, it’s a relative risk adjustment model. So you’re trading money between plans.
Jeff: As long as everybody is doing whatever they do to enhance coding, and they kind of do it equally across the market. Uh, it’s not as harmful to the ACA markets. It becomes harmful if there’s differentials. So if you’re massively enhancing your coding and I’m not,
Jeff: then you are either getting overcompensated or undercharged and I’m either getting overcharged or underpaid. In an ACA market scenario, if you could equalize it across the ACA market and have everybody kind of playing by the same set of rules, it works out.
Jeff: But this is federal funds on the other side, so it’s just the federal government spending more money. So I think Dr. Oz has been very public about his concerns about that, and I think he will want to do everything that CMS can to alter that and really ratchet down MA payments.
Joe: Well, this should be very interesting. I mean, as we go through the, the next benefit year, and I do know that CMS had updated some of the factors and some of the diagnosis codes that will go into the risk adjustment process and payments for plan year 2026. So that’ll be interesting based on how those are priced and how those benefits have been filed and approved
Joe: with respect to each state mandate, how those payments play out. Right? So who becomes overcompensated and who is undercompensated, and how will those be mitigated in plan year 27 and 28? Because we may see even more drastic strategic decisions made by carriers next year based on the results of those payments this year.
Joe: And that being said, so with this being a year of change, I did want to make an honorable mention of the work you’ve been doing with CMS and the workforce impacted by some of the recent decisions of public office. So, could you tell us a little bit more about some of the work you’re doing with Schedule F and CMS alumni?
Jeff: Certainly. In February, CMS lost a number of people, either because they availed themselves of the delayed resignation program as it became known where you could announce your intent to resign, go on administrative leave and depart government effective September 30th. So there was a couple hundred people that availed themselves of that.
Jeff: It doesn’t mean they want to stop working, they just have to find alternate employment, but they do have a period of time to do that where they’re continuing to be paid by the government. There was another group of probationary employees on February 14th. It’s not clear how many remain removed. It is probably in the 150 to 200 range.
Jeff: They are all looking for employment right now. It’s not clear when they’ll really fully understand their status because there’s been some litigation in cases that affect HHS, so they’ve kind of been in limbo for a few months, but they are still actively looking for jobs. It’s a super talented group of people.
Jeff: A lot of them have public health degrees. There’s a lot of great data people. So we are looking to get some junior folks placed if people have pipelines, where they bring in junior folks with healthcare expertise and strong analytic skills, both the coding, but also the thought process that goes into good data analysis.
Jeff: And then there was a reduction in force that hit on April 1st, and it is effective in June again, so people are on administrative leave right now. Um, and that’s around 300 people from CMS.
Jeff: So we are looking at probably in the neighborhood of, you know, six, 700 people that are out looking with various ranges of experiences. And I will point out that even some of our probationary employees, some of them came in as a career switch. So they were new to government, but they were not new to healthcare work.
Jeff: So we do have some highly experienced probationary employees and we have a lot of folks that were fresh out of school with either a master’s or an undergrad degree. So it’s a wide range of talent that’s out there and some have a lot of CMS experience, a lot of knowledge about CMS programs. So I think it is a great opportunity for folks that do value that government experience to look to pick these folks up and for people that just wanna pick up a good talent pool.
Joe: Thank you. And thank you for your work, with the CMS folks. It’s remarkable to me that such a large group of talented individuals is out there. I would say in my experience starting as a filer in healthcare, working for a large insurance company, and, you know, watching the ACA unfold to date, it is very hard to find folks with inherent knowledge transfer that keeps the ship sailing.
Joe: Right? So in terms of being able to understand, like you said, the federal systems and the platforms, reviewing a filing, approving a filing, actually issuing certifications and helping issuers serve the members to give them the care that they need, right?
Joe: So I’m glad you were able to mention, and, and thank you for the work that you’re doing.
Joe: So, Mr. Grant, this has been a great session and thank you for taking the time to join us. Where can we find you, where can we keep in touch with you and your team and Schedule F over the next couple plan years?
Jeff: Oh, certainly. So I can be reached. If folks wanna set up a meeting at info@schedf, that’s S-C-H-E-D-F.com. So info@schedf.com and happy to, to talk with anybody. And if you have any kind of job postings that you’d like to bring to our attention, you can send those to opportunities@schedf.com and we will put them on our listing and try to match people up that seem qualified for whatever opportunities you have.
Joe: Thank you very much. Valuable information and I’m sure a lot of folks will be looking forward to connecting with you. And that being said, that’s a wrap. Give us a like, give us a share and we’ll see you all at the next episode.
