Five major payer and hospital organizations are urging the Centers for Medicare and Medicaid Services to withdraw its proposal to allow non-network health plans to receive Qualified Health Plan certification. In a March 13 letter, these groups warned that the move could destabilize the individual insurance market and expose consumers to serious coverage risks.
What Is the CMS Proposal?
Origins of the Rule
CMS introduced the non-network QHP provision as part of a sweeping proposed rule published on February 9. The broader rule focused on ACA marketplace reforms aimed at lowering healthcare costs. However, one specific provision drew sharp criticism from leading industry organizations.
How QHP Certification Works
QHPs must meet strict federal standards. These standards include offering essential health benefits and adhering to cost-sharing limits. In turn, certified plans earn the right to be sold on the ACA marketplace. Traditionally, this certification applied exclusively to network-based plans with contracted provider agreements.
What Changes Under the Proposal
Non-network plans operate differently from traditional QHPs. They issue specific benefit amounts to enrollees but do not maintain contracted provider networks. Under the proposed rule, non-network plans would qualify for QHP certification if they can demonstrate that enough providers accept their benefit payments in full. CMS accepted public comments on this proposal until March 13.
Who Is Opposing the Rule?
Five Organizations Speak Out
The joint letter came from five prominent healthcare organizations. Together, they represent a broad coalition of payers and hospitals. The organizations include the Association for Community Affiliated Plans, the Alliance of Community Health Plans, America’s Essential Hospitals, AHIP, and the Federation of American Hospitals. Their unified stance signals deep, sector-wide concern about the proposal.
Key Concerns Raised by the Groups
Market Bifurcation and Risk Pool Distortion
The organizations argued strongly that allowing non-network plans to compete alongside network-based QHPs would split the individual market. This division, they warned, could distort risk pools and alter statewide average premiums. Since those premiums feed directly into risk-adjustment calculations, the downstream effects could be significant for the entire marketplace.
Health Status-Based Market Segmentation
Additionally, the groups flagged the risk of a market split based on health status. Non-network plans may appeal to healthier individuals seeking lower premiums. Meanwhile, sicker patients who need reliable provider access may cluster in network-based plans. This kind of adverse selection could raise premiums across the board for those who need coverage most.
Risks to Market Stability and Consumers
Uncompensated Care Concerns
The letter also raised the threat of rising uncompensated care costs. When patients do not clearly understand their plan’s coverage, hospitals often end up absorbing those costs. Non-network plans, with their less transparent benefit structures, could create more such situations. As a result, hospitals could face higher financial burdens without adequate compensation.
Provider Access Verification Challenges
Another major concern involves how CMS and states can verify adequate provider access. A non-network plan must be operational before regulators can confirm that sufficient providers are actually accepting its benefit payments. This creates a regulatory gap. Consumers could enroll in a plan only to discover later that their preferred providers do not accept it as payment in full.
Balance Billing Exposure
Furthermore, the organizations raised concerns about consumer protection from balance billing. Without contracted provider networks, patients are far more vulnerable to receiving bills for the difference between what the plan pays and what a provider charges. The letter stressed the need for clear guardrails to prevent this financial harm.
What the Organizations Are Asking CMS to Do
Primary Request: Withdraw the Provision
Most directly, all five organizations urged CMS to not move forward with the non-network QHP provision at all. Their primary position is that the risks to market stability, consumer protection, and provider access are too great to justify the change.
Minimum Ask: Delay and Gather More Data
At the same time, the groups acknowledged that if CMS is unwilling to drop the provision entirely, it should at least delay finalization. They specifically recommended issuing a Request for Information to gather more stakeholder input before taking action. This would give regulators, providers, and consumer advocates a greater opportunity to weigh in.
Call for Regulatory Clarity
Beyond the immediate request, the organizations called on CMS to clarify what “adequate provider access” means in the context of non-network plans. They also pushed for specifics on how that standard would be enforced and how consumers would be protected from balance billing.
Why This Matters for Healthcare Coverage
Equal Standards for All QHP Plans
The organizations made a clear and simple argument: all QHP plans sold on the marketplace should meet the same regulatory standards. Allowing one category of plan to operate under looser rules creates an uneven playing field. It also weakens the consumer protections that the ACA marketplace was designed to provide.
Long-Term Stability of the Individual Market
Ultimately, the concern is about the long-term health of the individual insurance market. A bifurcated market — where network and non-network plans compete under different rules — could erode trust, raise costs, and reduce access to care. Consequently, regulators must weigh these systemic risks carefully before finalizing the rule.
