New CMS scripture calls health coverage seekers to consumer-driven heaven

Go thee forth and negotiate prices with your doctor or local hospital system

Between Scylla and Charybdis in the Trump 2.0 marketplace

There is a throughline in Republican proposals, both legislative and regulatory, to “reform” health insurance, particularly in the ACA marketplace. Consistently, Republicans propose to reduce premiums paid by government and (sometimes) enrollees by

• increasing out-of-pocket exposure;

• narrowing provider networks; and

• increasing risk and uncertainty for enrollees.

CMS’s just-published 2027 Notice of Benefit and Payment Parameters (NBPP) for the ACA marketplace, a multi-part rule published annually, advances these goals on multiple fronts. The NBPP would expand access to catastrophic plans (available only without subsidy); degrade actuarial value in catastrophic and bronze plans by allowing them to add 30% to the highest allowable annual out-of-pocket maximum (to an eye-watering $15,400 per individual in 2027); deliberately draw healthier enrollees into the catastrophic market, worsening the main ACA risk pool; weaken network adequacy requirements; financially penalize states for incorporating their own coverage mandates in Essential Health Benefits (EHBJ) standards; and allow QHP certification of non-network plans.

I want to focus here on the certification of non-network plans, because it is a first swipe at the longstanding Republican goal of directing premium subsidies to plans reminiscent of the pre-ACA marketplace. In this case, CMS proposes to expose marketplace enrollees to out-of-pocket costs with no effective cap and to the balance billing that’s now mostly prohibited against enrollees in minimum essential coverage provided by marketplace or employer-sponsored plans.

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As with the first Trump administration’s expansion of the allowable duration of short-term plans, this rule reverses a relatively recent Democratic administration rule, in this case banning non-network plans in 2024. But a 2022 rule declining to impose such a ban noted that only twelve non-network plans had ever been certified as QHPs, all in Wisconsin in 2016. As with the extension of short-term plans, this Trump administration rule actively touts and promotes an option that insurers had almost entirely declined to put forward on their own. [Paragraph added 2/15.]

A non-network plan is essentially a fixed indemnity plan that pays providers according to a fixed formula, such as a percentage of Medicare payment rates (I’ve seen 125% and 150% Medicare quoted), with the patient potentially owing any amount billed in excess of the prescribed payment.

As with the first Trump administration’s expansion of the allowable duration of short-term plans, this rule reverses a relatively recent Democratic administration rule, in this case banning non-network plans in 2024. But a 2022 rule declining to impose such a ban noted that only twelve non-network plans had ever been certified as QHPs, all in Wisconsin in 2016. As with the extension of short-term plans, this Trump administration rule actively touts and promotes an option that insurers had almost entirely declined to put forward on their own. [Paragraph added 2/15.]

The proposed rule would “allow plans that do not use a network (non-network plans) to receive QHP certification by demonstrating that they ensure a sufficient choice of providers that accept the non-network plan’s benefit amount as payment in full, and reasonable and timely access to ECPs [essential community providers] that accept the plan's benefit amount as payment in full.”

One might think that an adequate “choice of providers that accept the non-network plans’ benefit amount as payment in full” would constitute a…network. The proposed rule stipulates that insurers proposing to offer such plans must convince regulators that this is the case. What is not required, however, is that the plan spell out for enrollees which providers accept the proffered payment as payment in full, let alone offer any kind of guarantee that designated providers would do so. There is a kind of vague gesture in this direction, in that the plans must report a “strategy for providing adequate customer service or online provider directory assistance resources to assist plan enrollees and potential enrollees in finding providers (including ECPs) in their area who will accept the plan’s benefit amount as payment in full.” But anything like a firm requirement for a definitive list on this front would effectively constitute a network.

Instead, CMS under current leadership indulges in the eternal Republican dream that rate-setting can be deputized to enrollees, who are cast as being empowered by the exciting opportunity to negotiate with providers:

…a non-network plan sets specified benefit amounts for covered services and communicates those benefit amounts to its enrollees in advance. Non-network plan enrollees use this benefit amount as a reference price for how much they should expect to pay for the receipt of covered services under the plan. With it, they can choose any provider for their care and compare and negotiate prices among available providers to find a provider who will accept the plan’s benefit amount as payment in full, such that the provider will not balance bill the enrollee for additional amounts beyond the plan’s benefit amount. This interaction between the enrollee and provider before services are rendered could limit the enrollee from incurring additional unforeseen out-of-pocket costs, particularly if the enrollee decides to pursue care with the provider at a cost below or equal to the plan’s benefit amount. Thus, both plan models are capable of providing a pathway for enrollees to limit out-of-pocket costs. Non-network plans are capable of providing an opportunity for individual enrollees to participate in efforts to lower their health care costs through individualized price comparisons and negotiations, while network plans rely heavily on health insurers to do so (p. 6408).

Attention, patients of America: don’t try this at home. Or at all. Anyone familiar with the Byzantine, convoluted and opaque nature of healthcare billing in the U.S. is not likely to embrace the prospect of calling of physician’s office or outpatient center and asking whether a formula stipulating payment for a particular service or cluster of services can be guaranteed sufficient. Even those Americans with Medicare/Medigap coverage, the gold standard for U.S. coverage, are forced by providers to sign contracts of adhesion requiring they pay any amount bill that the insurer does not pay, above and beyond the patient’s prescribed copay (though I have often crossed these provisions out or qualified them, including on a touchpad, without being called on it).

The NBPP directs that an insurer offering a non-network plan must report, among other things, “The non-network plan’s strategy for providing consumer-friendly and public information about potential balance billing scenarios and expected out-of-pocket costs, including historical data on actual out-of-pocket costs incurred by its enrollees while accessing providers (including ECPs) willing to accept the benefit amount as payment in full” (p. 6410). That amounts to a buyer beware warning for enrollees and a kind of average odds estimates — very different from information about which providers are guaranteed not to balance bill.

Given the balance billing risk, a non-network plan effectively has no out-of-pocket maximum — a nice complement to CMS’s other proposed addition to the marketplace, plans with a $15,400 OOP max. Non-network plans also raise serious questions about risk adjustment. The NBPP explicitly warns that non-network plans will likely attract healthier enrollees and so will have to pay into the risk adjustment system, and that they should price plans accordingly (p. 6461). In other words, the savings to enrollees that avoiding network premiums might entail will be negated by the need to pay a risk transfer adjustment, which will be priced into premiums. So what’s the point, other than to saddle enrollees with balance billing risk?

Lest there be any doubt on whom CMS envisions non-network plans placing the onus of determining whether the plans’ payments constitute payment in full, this rule includes several paeans to the empowerment of enrollees charged with figure this out. Among several such lyric productions, let’s let the last be representative:

Overall, non-network plans have great potential to reduce overall health care costs. First, they can empower enrollees to use price information on benefit amounts, when available, to shop for lower prices and negotiate directly with providers, fostering increased competition and potentially driving down prices across the market. When enrollees have access to accurate, timely health care pricing information, they can make informed decisions about their health care spending and actively seek the best value for medically necessary services. We anticipate that this consumer-driven approach would create a more competitive marketplace where providers would need to consider their pricing strategies more carefully to attract and retain patients. Additionally, as more enrollees engage in shopping and direct price negotiations, providers may be incentivized to proactively offer more competitive rates to maintain their market share, potentially leading to broader market-wide price reductions that benefit many enrollees (p. 6410).

Thus CMS proposes to transform the ACA marketplace Republican into “consumer driven” Eden. Patients, go thee forth and actively seek the best value for medically necessary services when your cancer diagnosis comes down. You’ve not fully empowered yourself until you’ve driven a hard bargain with your local cancer center for the dizzying array of clustered services they’re going to bill you for.

In the 2027 NBPP, we have bookends of the Republican approach to improving the ACA marketplace. On one end, catastrophic plans with no subsidy (thanks in most cases to Republican refusal to renew the enhanced subsidies that expired in 2025) and $15,000 individual out-of-pocket maximums. On the other end, subsidized plans that effectively bulldoze the out-of-pocket maximum and expose enrollees to the balance billing that the No Surprises Act mostly prohibited. On the catastrophic end, a degrading of the subsidy-eligible risk pool; on the non-network end, an inducement to cherry-pick healthy enrollees and thus increase imbalances in the risk pool. On both ends, increased “opportunities” for enrollees to take on more risk and more out-of-pocket expense.

Update, 2/16/26: an email correspondent points out that CMS anticipates that the premium reductions stemming from low claims in these plans will outstrip the risk management payback — and that CMS anticipates lower premium subsidies as a result: “This dynamic also means that non-network plans may tend to have lower premiums than network plans, so we would expect that they would tend to be among the least expensive plans in a particular area. This could affect premium tax credits to the extent that non-network plans are the lowest and/or second-lowest cost silver plan in that area” (p. 6461).

Image: Between Scylla and Charybdis - Adolf Hirémy-Hirschl, 1910