More Flexibility, More Choices: CMS Opens the Door to New Bronze Plan Designs

In the 2027 Notice of Benefit and Payment Parameters, CMS announced their ruling that allows issuers to offer bronze plans that exceed the statutory MOOP (Maximum-out-of-Pocket) limit as long as the issuer simultaneously offers at least one bronze plan that within the standard MOOP limit (standard plan). Before this rule, every metal tier and plan had to comply with the statutory MOOP limit of $12000 to reach standard Actuarial Value (AV). For Platinum, Gold, Silver, and Bronze, their AV targets are 90%, 80%, 70%, and 60% respectively. CMS’s concern is that the statutory MOOP limit was constraining bronze plans; these plans were hitting the MOOP ceiling and seeing their AV creep above 62%. The new rule opens the door for insurers to design cost-sharing structures that achieve bronze AV without being bound by a fixed MOOP limit, hence the “flexibility.”

Impact on Insurer Product Design and Pricing

Prior to this rule, most bronze plans looked the same from a design perspective; the AV and MOOP constraints left little room for variation, effectively making them a high-deductible plan where enrollees pay out-of-pocket until reaching the MOOP. CMS noted in §§ 156.136 and 156.155 (b) that when bronze plans have an AV between 62% and 65%, they are closer to the bottom of the silver de minimis range which undermines the integrity of silver plan cost-sharing designs and makes it more difficult for consumers to distinguish between the two metal tiers. With the new rule, insurers offering a higher MOOP bronze variant have more room to play. Having a $15,600 MOOP instead of $12,000 offers a wider gap to adjust deductibles and coinsurance rates, copays for specific services, or HSA-compatible structures while still meeting the 60% AV. A higher MOOP can mean lower premiums for members, this translates to more manageable monthly costs but with more exposure to upfront out-of-pocket expenses. The rule allows for can bronze plan designs where the members absorb more of the total cost while insurers still meet the 60% AV requirement. By shifting the near-term cost the member, the insurer can reduce its expected claims spend and shift some of those savings through a lower premium. For price sensitive or low utilizing members these bronze plans can make coverage more attractive but for the insurers it can be competitive given that premium heavily influences consumer decisions. Therefore, good product design is necessary.

What does this mean operationally for issuers: You can’t file just one bronze plan with the new MOOP limit you need a standard one as well; per service area. The standard MOOP plan and the new $15,600 MOOP limit plan must be different but designed together as a system, both plans need to pass in the AV calculator meaning it can double your plan design load and the filing work in your market.

What the AV calculator shows

For insurers that want to see the new MOOP limit into effect, the AV calculator in Plans and Benefits allows the insurer to model these flexibilities.

Scenario 1:

A bronze plan with the standard MOOP limit of $12,000, 60% coinsurance, and a $6,000 deductible we get an AV value of 60.63 % vs a bronze plan with a new MOOP of $14,000, coinsurance of 60%, and deductible of $6,000 gets an AV of 58.91%; both which include integrated drug and medical deductible.

Scenario 2:

A bronze plan with a MOOP of $10,000, 60% coinsurance, and a $6,000 deductible, has the AV increase to 62.68%. The AV for the standard plan designs exceeds the allowable de-minimis range. By contrast, a bronze plan with the new MOOP limit increased to $15,000, 60% coinsurance, and a $6,000 deductible, sees the AV percentage decrease to 58.15%; still within the allowable de-minimums range.

So yes, what CMS intended theoretically works for this example. The increased MOOP limit gives insurers a wider gap to adjust deductible, coinsurance, and co-pays to avoid reaching the MOOP ceiling limit and getting close to the bottom of the silver de minimis range. It is crucial that insurers model multiple scenarios for both the standard MOOP plan and the high MOOP plan, with the understanding that each design choice will attract different risk profiles.

Risk Adjustment

Of course, with everything we do in the ACA it all leads back to risk adjustment, insurers will need to factor in what this flexibility can do to statewide premium and how that can affect transfers. Wakley highlights this concern in their recently released white paper regarding the NBPP ruling.

Things to consider:

· If premiums decrease and that cause statewide premium to shift how does that affect receiver’s vs payers? Insurers can either respond or absorb the consequences come time for the Edge Server submissions.

· If a portion of current healthy silver members buy down to a high MOOP bronze, what does that do to the average silver risk score?

· Will Insurers want to deal with the uncertainty this rule may cause across other metal tiers? And will they have a choice If competitors begin offering lower-premium bronze plans? Insurers that get priced out of bronze may exit the market all together. Those members would need to go somewhere else, with fewer options.

Bronze members are already price sensitive; they are more likely to switch plans or drop coverage if premiums increase by a small amount or if the lower-cost plan benefits are not substantially different. These types of enrollees are more likely to switch to a competitor’s bronze plan if their monthly cost is less expensive, even by a couple of dollars.

Final Thoughts

The new MOOP limit is something insurers need to be looking at quickly. The right approach is to model it now, before 2027 filing season closes. That means running your plan designs through the 2027 AV calculator, testing AV sensitivity around deductible and MOOP combinations, copay levels, and coinsurance rates. Specifically, to understand how the higher MOOP limit creates room to lower premiums and bronze risk pricing. For issuers that have not started that analysis, this is the moment to begin.