The 2026 Payment Notice proposed one change to the current methodology, regarding a formula element known as the premium adjustment factor (PAF) which estimated the median CSR load for non-BHP states compared to the BHP states, where the CSR loading was much lower. The PAF was developed using data from QHP issuers in all states, by requesting QHPs provide the percentage adjustment applied to silver level QHP premiums in 2018 to account for the discontinuance of HHS making CSR payments. For non-BHP states the median adjustment was 20.0%, and for the BHP states the median adjustment was 1.0%. For program years 2018 to 2024 the factor has been (and is continuing to be) 1.188 = (1.20/1.01) for BHP states (finalized continuing this factor). For states in their first year in BHP, CSR loading is expected to have already been considered so the factor is 1.00. These factors are not changing. However, for a partial year implementation the factor should be between 1.00 and 1.188. Beginning in 2026, states that have not implemented the BHP for a full program year, the state would work with CMS to determine the CSR loads in the state to determine what the partial adjustment should be. This would start with the State determining the CSR adjustment included by QHP issuers in their premium, reporting that to CMS, and calculating the PAF = (1.20/(1+CSR load)). Public comments acknowledged concerns continuing to use 2018 CSR loads, however, the proposal was finalized as proposed.
Additionally, CMS issued a technical correction where if there are more than one second lowest cost silver plans in a county, the BHP payment would be based on the premium of the second lowest cost silver plan applicable to the largest portion of the county as measured by total population. This was finalized as proposed. A discussion was included where commenters noted at least one state uses the third lowest cost silver plan premium if there are two or more second lowest cost premiums in an area, and flexibility was requested although CMS indicated they did not believe there was any basis to not use the second lowest cost silver plans.