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Federal Register / Vol. 86, No. 127 / Wednesday, July 7, 2021 / Rules and Regulations
discussed in section III.D.7 of this final notice.
In the final payment methodologies for program years 2020 and 2021 and proposed payment methodology for 2022, we included a factor to account for the impact of the discontinuation of CSR payments on individuals selection of metal tier level plans in the Exchange, referred to as the Metal Tier Selection Factor. Specifically, the MTSF
was included to account for the impact of QHP enrollees eligible for PTC
choosing bronze-level plans which have lower premiums than silver-level plans and receiving less than the full value of the PTC, which was amplified after the discontinuation of the CSR
payments. However, because section 9661 of the ARP reduces the maximum percentage of an individuals household income that can be charged in premiums for purchasing the second lowest cost silver plan on the Exchange, we believe consumer behavior around selecting different metal tier level plans likely will change significantly. In other words, we anticipate that, as a result of the ARP, more individuals with household income below 200 percent FPL will enroll in silver-level plans because these plans can now be purchased for a lower premium amount, and for many individuals, there will be silver-level plans with $0 premium.
Therefore, we are removing the MTSF
from the final payment methodology for program year 2022.

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II. Summary of the Proposed Provisions and Analysis of and Responses to the Public Comments The following sections, arranged by subject area, include a summary of the public comments that we received and our responses. We received 11 public comments from individuals and organizations, including, but not limited to, state government agencies, other government agencies, and private citizens. In this section, we outline the proposed provisions and provide a summary of the public comments received and our responses. For a complete and full description of the BHP proposed funding methodology for program year 2022, see the 2022
proposed BHP Payment Notice.
A. Background In the 2022 proposed BHP Payment Notice, we proposed the methodology for how the federal BHP payments would be calculated for program year 2022.
We received the following comments on the background information included in the 2022 proposed BHP Payment Notice:

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Comment: Several commenters were supportive of the 2022 BHP payment methodology described in the 2022
proposed BHP Payment Notice.
Response: We appreciate the support from these commenters. As described further in this final notice, we are finalizing the 2022 methodology as proposed in the 2022 proposed BHP
Payment Notice, with the exception of the removal of the MTSF and updating the applicable percentages of household income used to calculate APTC amounts and the value of the IRF, as described in section I.C in this final notice.
B. Overview of the Funding Methodology and Calculation of the Payment Amount We proposed in the overview of the funding methodology to calculate the PTC and CSR as consistently as possible and in general alignment with the methodology used by Exchanges to calculate APTC and CSR, and by the Internal Revenue Service IRS to calculate the allowable PTC. We proposed four equations 1, 2a, 2b, and 3 that would, if finalized, compose the overall BHP payment methodology.
We received the following comments on the overview of the funding methodology included in the 2022
proposed BHP Payment Notice:
Comment: One commenter recommended CMS apply the proposed methodology only when a state initially establishes a BHP. This commenter recommended that after a BHP is established, states should be allowed to use prior program year premiums for payments. The commenter reasoned that simplifying the BHP payment methodology would provide administrative relief as well as greater certainty of expected funds for states.
Response: We did not propose and are not adopting the recommendation related to the proposed methodology applying only to a states initial program year. We also note that current Federal BHP regulations in 600.605 specify the BHP payment methodology.
Specifically, 600.605c provides that the Secretary will annually adjust the payment methodology on a prospective basis to adjust for any changes in the calculation of the PTC and CSR
components to the extent that necessary data is available. Further, regulations at 600.610 require that a proposed BHP
payment methodology be published in the Federal Register each October, 2
years prior to the applicable program year, and describe the proposed funding methodology for the relevant BHP year.
The final BHP payment methodology must be published in the Federal Register in February, and include the
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final BHP payment methodology, as well as the federal BHP payment rates for the applicable BHP program year.
Changes to this process, like the one suggested by the commenter, would require amendments to existing BHP
regulations.
Comment: One commenter recommended that for the purpose of calculating BHP payments, CMS assume that American Indian and Alaska Native AI/AN enrollees in BHPs would have enrolled in the second-lowest cost bronze-level plan instead of the secondlowest cost silver-level plan on the Exchanges.
Response: While AI/AN enrollees may enroll in the second-lowest cost bronzelevel plan and continue to receive CSRs, PTCs continue to be based on the second-lowest cost silver-level QHP.
Therefore, BHP payments to states for AI/AN and all other enrollees need to continue to be based on the secondlowest cost silver QHP.
We did not propose and are not adopting this recommendation. The only portion of the rate affected by the use of the lowest-cost bronze-level plan is the CSR portion of the BHP payment;
due to the discontinuance of CSR
payments and the accompanying modification to the BHP payment methodology, the CSR portion of the payment is assigned a value of 0, and therefore, any change to the assumption about which bronze-level QHP is used would have no effect on the BHP
payments.
Comment: One commenter recommended that AI/AN premiums in a BHP should not exceed the cost of the second-lowest cost bronze-level plan and suggested that CMS provide additional BHP funding to states in order to ensure that AI/AN populations do not experience a premium increase when enrolling in BHP from a bronzelevel plan on the Exchange.
Response: We appreciate and understand the commenters concern regarding the premium levels for the AI/
AN population. However, section 1331a2Ai of the Patient Protection and Affordable Care Act requires that states operating BHPs must ensure that individuals do not pay a higher monthly premium than they would have if they had been enrolled in the second lowest cost silver-level QHP in an Exchange, after reduction for any PTCs and CSRs allowable with respect to either plan. In addition, as specified in 600.705c1, BHP states are permitted to use BHP
trust funds to reduce premiums and cost sharing for eligible individuals enrolled in standard health plans under BHP. For example, Minnesota does not charge premiums for the AI/AN population.

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