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Federal Register / Vol. 86, No. 127 / Wednesday, July 7, 2021 / Rules and Regulations
for the tax year. In general, we have relied on values for factors in the payment methodology specified in statute or other regulations as available, and have developed values for other factors not otherwise specified in statute, or previously calculated in other regulations, to simulate the values of the PTCs and CSRs that BHP enrollees would have received if they had enrolled in QHPs offered through an Exchange. In accordance with section 1331d3Aiii of the Patient Protection and Affordable Care Act, the final funding methodology must be certified by the Chief Actuary of CMS, in consultation with the Office of Tax Analysis OTA of the Department of the Treasury, as having met the requirements of section 1331d3Aii of the Patient Protection and Affordable Care Act.
Section 1331d3Aii of the Patient Protection and Affordable Care Act specifies that the payment determination shall take into account all relevant factors necessary to determine the value of the PTCs and CSRs that would have been provided to eligible individuals, including but not limited to, the age and income of the enrollee, whether the enrollment is for self-only or family coverage, geographic differences in average spending for health care across rating areas, the health status of the enrollee for purposes of determining risk adjustment payments and reinsurance payments that would have been made if the enrollee had enrolled in a QHP through an Exchange, and whether any reconciliation of APTC and CSR would have occurred if the enrollee had been so enrolled. Under the payment methodologies for 2015 79 FR 13887
through 14151 published on March 12, 2014, for 2016 80 FR 9636 through 9648 published on February 24, 2015, for 2017 and 2018 81 FR 10091 through 10105 published on February 29, 2016, for 2019 and 2020 84 FR 59529
through published on November 5, 2019, and for 2021 85 FR 49264
through 49280 published on August 13, 2020 hereinafter referred to as the 2021 final BHP Payment Notice, the total federal BHP payment amount has been calculated using multiple rate cells in each state. Each rate cell represents a unique combination of age range if applicable, geographic area, coverage
category for example, self-only or twoadult coverage through the BHP, household size, and income range as a percentage of FPL, and there is a distinct rate cell for individuals in each coverage category within a particular age range who reside in a specific geographic area and are in households of the same size and income range. The BHP payment rates developed also are consistent with the states rules on age rating. Thus, in the case of a state that does not use age as a rating factor on an Exchange, the BHP payment rates would not vary by age.
Under the methodology finalized in the August 2020 final BHP Payment Notice, the rate for each rate cell is calculated in two parts. The first part is equal to 95 percent of the estimated PTC
that would have been paid if a BHP
enrollee in that rate cell had instead enrolled in a QHP in an Exchange. The second part is equal to 95 percent of the estimated CSR payment that would have been made if a BHP enrollee in that rate cell had instead enrolled in a QHP in an Exchange. These two parts are added together and the total rate for that rate cell would be equal to the sum of the PTC and CSR rates. As noted in the August 2020 final BHP Payment Notice, we currently assign a value of zero to the CSR portion of the BHP payment rate calculation, because there is presently no available appropriation from which we can make the CSR
portion of any BHP Payment.
We finalize that Equation 1 will be used to calculate the estimated PTC for eligible individuals enrolled in the BHP
in each rate cell. We note that throughout this final methodology, when we refer to enrollees and enrollment data, we mean data regarding individuals who are enrolled in the BHP who have been found eligible for the BHP using the eligibility and verification requirements that are applicable in the states most recent certified Blueprint. By applying the equations separately to rate cells based on age if applicable, income and other factors, we effectively take those factors into account in the calculation. In addition, the equations reflect the estimated experience of individuals in each rate cell if enrolled in coverage through an Exchange, taking into account additional relevant variables.
Each of the variables in the equations is
Equation 1: PTCa,g,c,h,i
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defined in this section, and further detail is provided later in this section of this final methodology. In addition, we describe in Equation 2a and Equation 2b below how we will calculate the adjusted reference premium that is used in Equation 1.
Equation 1: Estimated PTC by Rate Cell The estimated PTC, on a per enrollee basis, will be calculated for each rate cell for each state based on age range if applicable, geographic area, coverage category, household size, and income range. The PTC portion of the rate will be calculated in a manner consistent with the methodology used to calculate the PTC for persons enrolled in a QHP, with 5 adjustments. First, the PTC
portion of the rate for each rate cell will represent the mean, or average, expected PTC that all persons in the rate cell would receive, rather than being calculated for each individual enrollee.
Second, the reference premium RP
described in section III.D.1. of this final methodology used to calculate the PTC
would be adjusted for the BHP
population health status, and in the case of a state that elects to use 2021
premiums for the basis of the BHP
federal payment, for the projected change in the premium from 2021 to 2022, to which the rates announced in the final payment methodology would apply. These adjustments are described in Equation 2a and Equation 2b.
Third, the PTC will be adjusted prospectively to reflect the mean, or average, net expected impact of income reconciliation on the combination of all persons enrolled in the BHP; this adjustment, the IRF, as described in section III.D.7. of this final methodology, will account for the impact on the PTC that would have occurred had such reconciliation been performed. Finally, the rate is multiplied by 95 percent, consistent with section 1331d3Ai of the Patient Protection and Affordable Care Act. We note that in the situation where the average income contribution of an enrollee would exceed the adjusted reference premium, we will calculate the PTC to be equal to 0 and would not allow the value of the PTC to be negative.
We will use Equation 1 to calculate the PTC rate, consistent with the methodology described above:

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