CMS Reduces the Exchange User Fee to Support Lower Premiums for the Consumer

By: Aimee Wilcox, CPMA, CCS-P, CST, MA, MT, Director of Content

Published: January 7th, 2021

It has been no secret that Americans have been complaining about the high cost of health plans since implementation of the Affordable Care Act (ACA). Premiums and deductibles have skyrocketed and in many states are equal to or exceed the cost of their rent or mortgage payments. As such, most Americans seek to obtain employment with companies that offer employer-sponsored insurance (ESI), in an attempt to partially subsidize the cost of health insurance.

According to the Urban Institute's "Timely Analysis of Health Policy Issues,” data obtained from the U.S. Census Bureau Household Pulse Survey revealed that between March 21st and April 23rd, 26 million people filed for unemployment insurance claims. This survey was developed to assess the following areas in real time, as the pandemic and resulting recession unfold: 

• changes in household employment 
• spending 
• food security 
• health care  
• health 

The filing of these 26 million uninsurance claims were the result of job losses due to the COVID-19-related public health emergency (PHE), as well as state and federal mandates, that resulted in the closure of many businesses deemed “nonessential.” A total of three Household Pulse Surveys have been fielded during the following dates:  

• March 21 – April 23
• April 23 – May 12 
• July 9 – July 21 

These surveys have indicated that an estimated 3.3 million Americans under the age of 65 lost ESI, with the hardest hit groups including:  

• Hispanic adults 
• Younger adults 
• Men 
• Adults with equal to or less than a high school degree 

According to the study, during this time the health insurance exchanges also experienced a surge in new enrollees, which increased pressure on federal subsidies for marketplace plans and state Medicaid programs to control and prevent rising uninsurance rates. To counter this impending financial blow, the 2022 payment notice will decrease the federal exchange user fee: a required monthly payment paid by the payers who offer health plans on the federal exchange to help pay for the functionality of the exchange. CMS stated, “These reductions directly contribute to lower premiums,” arguing that by reducing the exchange user fee, payers can pass the savings directly to the consumer.