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Federal Register / Vol. 86, No. 127 / Wednesday, July 7, 2021 / Rules and Regulations
because one or more QHPs in the familys geographic area might not offer family coverage that includes the niece.
We believe that it would not be possible to replicate such variations for calculating the BHP payment and believe that in the aggregate, they will not result in a significant difference in the payment. Thus, we will use the second lowest cost silver plan available to any enrollee for a given age, geographic area, and coverage category.
This choice of RP relies on an assumption about enrollment in the Exchanges. In the payment methodologies for program years 2015
through 2019, we had assumed that all persons enrolled in the BHP would have elected to enroll in a silver level plan if they had instead enrolled in a QHP
through an Exchange and that the QHP
premium would not be lower than the value of the PTC. In the November 2019
final BHP Payment Notice, we continued to use the second-lowest cost silver plan premium as the RP, but for the 2020 payments we changed the assumption about which metal tier plans enrollees would choose see section III.D.6. on the MTSF in this final methodology. In the 2021 payment methodology, we continued to account for how enrollees may choose other metal tier plans by applying the MTSF.
For the 2022 payment methodology, we will not continue to account for how enrollees may choose other metal tier plans by removing the MTSF as described in section III.D.6. of this final methodology.
We do not believe it is appropriate to adjust the payment for an assumption that some BHP enrollees would not have enrolled in QHPs for purposes of calculating the BHP payment rates, since section 1331d3Aii of the Patient Protection and Affordable Care Act requires the calculation of such rates as if the enrollee had enrolled in a QHP through an Exchange.
The applicable age bracket if any will be one dimension of each rate cell.
We propose to assume a uniform distribution of ages and estimate the average premium amount within each rate cell. We believe that assuming a uniform distribution of ages within these ranges is a reasonable approach and would produce a reliable determination of the total monthly payment for BHP enrollees. We also believe this approach will avoid potential inaccuracies that could otherwise occur in relatively small payment cells if age distribution were measured by the number of persons eligible or enrolled.
We will use geographic areas based on the rating areas used in the Exchanges.

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We will define each geographic area so that the RP is the same throughout the geographic area. When the RP varies within a rating area, we will define geographic areas as aggregations of counties with the same RP. Although plans are allowed to serve geographic areas smaller than counties after obtaining our approval, no geographic area, for purposes of defining BHP
payment rate cells, will be smaller than a county. We do not believe that this assumption will have a significant impact on federal payment levels and it would simplify both the calculation of BHP payment rates and the operation of the BHP.
Finally, in terms of the coverage category, federal payment rates only recognize self-only and two-adult coverage, with exceptions that account for children who are potentially eligible for the BHP. First, in states that set the upper income threshold for childrens Medicaid and CHIP eligibility below 200 percent of FPL based on modified adjusted gross income MAGI, children in households with incomes between that threshold and 200 percent of FPL
would be potentially eligible for the BHP. Currently, the only states in this category are Idaho and North Dakota.10
Second, the BHP will include lawfully present immigrant children with household incomes at or below 200
percent of FPL in states that have not exercised the option under sections 1903v4Aii and 2107e1E of the Act to qualify all otherwise eligible, lawfully present immigrant children for Medicaid and CHIP. States that fall within these exceptions will be identified based on their Medicaid and CHIP State Plans, and the rate cells will include appropriate categories of BHP
family coverage for children. For example, Idahos Medicaid and CHIP
eligibility is limited to families with MAGI at or below 185 percent FPL. If Idaho implemented a BHP, Idaho children with household incomes between 185 and 200 percent could qualify. In other states, BHP eligibility will generally be restricted to adults, since children who are citizens or lawfully present immigrants and live in households with incomes at or below 200 percent of FPL will qualify for Medicaid or CHIP, and thus be ineligible for a BHP under section 1331e1C of the Patient Protection and Affordable Care Act, which limits a BHP to individuals who are ineligible for minimum essential coverage as defined in 26 U.S.C. 5000Af.
10 CMCS. State Medicaid, CHIP and BHP Income Eligibility Standards Effective October 1, 2020.

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2. Premium Adjustment Factor PAF
The PAF considers the premium increases in other states that took effect after we discontinued payments to issuers for CSRs provided to enrollees in QHPs offered through Exchanges.
Despite the discontinuance of federal payments for CSRs, QHP issuers are required to provide CSRs to eligible enrollees. As a result, many QHP issuers increased the silver-level plan premiums to account for those additional costs; adjustments and how those were applied for example, to only silver-level plans or to all metal tier plans varied across states. For the states operating BHPs in 2018, the increases in premiums were relatively minor, because the majority of enrollees eligible for CSRs and all who were eligible for the largest CSRs were enrolled in the BHP and not in QHPs on the Exchanges, and therefore issuers in BHP states did not significantly raise premiums to cover unpaid CSR costs.
In the Final Administrative Order, the 2019 final BHP Payment Notice, the 2020 final BHP Payment Notice, and the 2021 final BHP Payment Notice we incorporated the PAF into the BHP
payment methodologies for 2018, 2019, 2020, and 2021 to capture the impact of how other states responded to us ceasing to pay CSRs. We will include the PAF in the 2022 payment methodology and to calculate it in the same manner as in the Final Administrative Order. In the event that an appropriation for CSRs for 2022 is made, we would determine whether and how to modify the PAF in the payment methodology.
Under the Final Administrative Order, we calculated the PAF by using information sought from QHP issuers in each state and the District of Columbia, and determined the premium adjustment that the responding QHP
issuers made to each silver level plan in 2018 to account for the discontinuation of CSR payments to QHP issuers. Based on the data collected, we estimated the median adjustment for silver level QHPs nationwide excluding those in the two BHP states. To the extent that QHP
issuers made no adjustment or the adjustment was zero, this would be counted as zero in determining the median adjustment made to all silver level QHPs nationwide. If the amount of the adjustment was unknownor we determined that it should be excluded for methodological reasons for example, the adjustment was negative, an outlier, or unreasonablethen we did not count the adjustment towards
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