Biden Administration Finalizes Two Major Regulations Affecting Medicare and Private Coverage in 2025

Last week, the Departments of Health and Human Services (HHS) released the final versions of the 2025 Notice of Benefits and Payment Parameters, and the Centers for Medicare and Medicaid Services (CMS) issued the 2025 Rate Announcement for the Medicare Advantage and Medicare Part D Prescription Drug Programs. These two measures will govern how private health insurance and private Medicare plans handle coverage and payment issues during the year ahead.

Notice of Benefits and Payment Parameters

This annual rule related to the Affordable Care Act (ACA) is typically a catch-all measure the federal government uses to implement ACA provisions and policies concerning private health insurance and the health insurance exchange marketplace. Some highlights include:

  • Multiple small policy changes streamline the enrollment process for people who buy individual coverage through a health insurance exchange.
  • An extension of a pandemic special enrollment period qualifying events to allow people with family incomes at or below 150% of the federal poverty level to enroll in exchange-based coverage at any point during the calendar year rather than just the annual enrollment period.
  • Allowing states to add routine adult dental services to their essential health benefits (EHBs) base benchmark plan starting in 2027.
  • Clarifying that if a plan includes coverage of prescription drugs in a manner that exceeds the coverage provided under the applicable state EHB benchmark plan, the more generous coverage the plan offers is still EHB coverage subject to annual maximum-out-of-pocket limits and the prohibition on annual and lifetime dollar limits, unless the coverage of the drug is subject to a state mandate. However, the regulatory provision finalized last week only applies to non-grandfathered individual and small group fully insured coverage.
  • A FAQ document issued along with the rule notes that the new prescription drug coverage requirement does not presently apply to self-funded, level-funded, and large group fully insured plans. However, it does indicate that the Administration intends to propose extending this requirement to those markets in a future regulation.

2025 Rate Announcement for Medicare Advantage and Part D Plans

The proposed version of this rule would have dramatically changed how Medicare agents are compensated and eliminated the role of managing agencies/general agencies in the Medicare Advantage/Part D plan administration and sales and marketing processes. The Biden Administration did not finalize the more dramatic changes. Still, the following changes regarding the payment of Medicare agents and brokers will take effect beginning with the 2025 Medicare annual election period:

  • A new definition of “compensation” to encompass all activities associated with the sales to/enrollment of an individual into a Medicare Advantage or Part D plan.
  • An increase in the national agent/broker fixed compensation amount for initial enrollments into a Medicare Advantage or Part D plan by $100, as opposed to the initially proposed increase of $31.
  • A general prohibition on contract terms between Medicare Advantage organizations/Part D sponsors and third-party marketing organizations (TPMOs) that incentivize agents or brokers to prioritize sales over recommending the best plan for an enrollee’s needs. Additionally, it requires TPMOs to obtain informed prior individual consent before sharing any personal beneficiary data collected for marketing, Medicare Advantage, or Part D enrollment purposes. This consent must be transparently disclosed and obtained individually for each disclosure, not through blanket consent forms.

The rule also includes:

  • A requirement for TPMOs to obtain informed prior individual consent to share any personal beneficiary data collected for marketing, Medicare Advantage, or Part D enrollment purposes. TPMOs must use transparent and prominently placed disclosure forms, and the consent documents cannot be blanket consent forms. Instead, TPMOs must obtain individual consent for each disclosure.
  • Multiple policy changes, including new network adequacy requirements, intended to improve access to behavioral health care services for Medicare Advantage plan enrollees.
  • A requirement for Medicare Advantage plans to issue a “Mid-Year Enrollee Notification of Unused Supplemental Benefits” annually between June 30 and July 31 of the plan year. Plans must personalize notices for each enrollee and include a list of any supplemental benefits not accessed by the individual during the first six months of the year. In addition, the notification must consist of the scope of the benefit, cost-sharing, instructions on how to access the benefit, any network application information for each available benefit, and a customer service number to call if additional help is needed.
  • A mandate for each Medicare Advantage plan’s utilization management committee to include at least one member with expertise in health equity. In addition, utilization management committees will need to annually conduct plan-level health equity analyses on prior authorization procedures and make the results publicly available.

If you have questions regarding the above measures, please do not hesitate to contact us: