{"id":19549,"date":"2026-04-30T15:00:46","date_gmt":"2026-04-30T19:00:46","guid":{"rendered":"https:\/\/shvs.org\/?p=19549"},"modified":"2026-04-30T15:00:50","modified_gmt":"2026-04-30T19:00:50","slug":"changes-to-the-actuarial-value-calculator-for-2027","status":"publish","type":"post","link":"https:\/\/shvs.org\/changes-to-the-actuarial-value-calculator-for-2027\/","title":{"rendered":"\u200b\u200b\u200bChanges to the Actuarial Value Calculator\u00a0for 2027"},"content":{"rendered":"\n

Jason Levitis, Urban Institute, and Sabrina Corlette, Georgetown CHIR<\/i>[1]<\/a><\/sup><\/p>\n

On February 26, 2026, the Centers for Medicare and Medicaid Services (CMS) released the actuarial value calculator (AVC) for 2027<\/a> and a document explaining the methodology<\/a>. The AVC is a tool published annually that measures the actuarial value (AV) of plans in the individual and small group markets. This expert perspective describes key AVC changes for 2027 and a potential future change that raise novel issues state regulators should be aware of.<\/p>\n

Actuarial value is a common measure of plan generosity. It represents the share of healthcare costs of an average population of enrollees that are covered by the plan, as opposed to covered by enrollees through cost-sharing including deductibles and co-payments. Under the Affordable Care Act (ACA), plans fall into different levels of coverage (that is, bronze, silver, gold, or platinum) based on their AV value. In addition, Marketplace silver plans have variants with higher AV levels (73%, 87%, or 94%) that reflect the provision of cost-sharing reductions. The AVC takes as inputs a plan\u2019s various cost-sharing parameters and returns an AV for the plan.<\/p>\n

The 2027 AVC includes three significant methodological changes, some of which are not fully explained in the accompanying documentation. CMS\u2019 proposed Notice of Benefit and Payment Parameters (NBPP) for 2027<\/a> requests comments on an additional change to future AVCs. Some of these changes will increase consumers\u2019 costs compared to prior years\u2019 plans of the same AV. Although the comment period for the NBPP has closed, stakeholders have the opportunity to comment on these changes outside of the rulemaking process in the months ahead.<\/p>\n

The following are descriptions of the four key changes. The first two substantially increase cost-sharing at a given AV value.\u00a0<\/p>\n

    \n
  1. Requiring higher cost-sharing for platinum and 94% AV cost-sharing reduction variant silver plans, which increases cost-sharing. <\/strong>The 2027 AVC incorporates new utilization data that will have the effect of requiring substantially higher cost-sharing for platinum plans and 94%-AV silver plans. This will reduce premiums for both platinum and silver plans, which reflect insurers\u2019 enrollment-weighted cost across all silver variants. Importantly, the decline in silver premiums will reduce the purchasing power of premium tax credits (PTCs), increasing net premiums for enrollees who enroll in non-silver plans. In comments on the NBPP, one issuer noted<\/a> that this change indicates that CMS assumes a \u201c62.1% increase in annual claims costs for the platinum\/CSR 150 sample\u2014a significant outlier compared to the 1.9%\u20135.1% increases in other tiers [that] appears inconsistent with broader national healthcare data.\u201d<\/li>\n<\/ol>\n

    This change has been reported<\/a> by independent actuaries but is not explained in either the AVC methodology document<\/a> or the user guide included in the AVC itself<\/a>; both include only vague references to \u201cupdating\u2026platinum enrollee weights.\u201d<\/p>\n

      \n
    1. Request for comments on changing the enrollee population used in the AVC sample starting in 2028, which would further increase cost-sharing.<\/strong> The AVC has for several years excluded from its claims data enrollees representing the costliest 0.5% of the distribution. The proposed NBPP requests comments on adding this group back, starting with the AVC for 2028. This would further increase enrollee cost-sharing and reduce premiums at a given AV level, which in turn would decrease PTC amounts.<\/li>\n<\/ol>\n

      In the proposed NBPP, CMS notes that this change would have a large effect on the measured AVs, particularly in the bronze tier. For example, this change would increase the measured AV of a typical bronze plan by five to six percentage points, which means that a plan that the current calculator would assign an AV of around 55% could now qualify as a bronze plan. Effects in higher metal tiers would be smaller, but still substantial.<\/p>\n

        \n
      1. Incorporating out-of-network emergency claims, which moderately increases cost-sharing<\/strong>. The AVC has historically been based on data reflecting only in-network claims. But the No Surprises Act<\/a> requires out-of-network cost-sharing for items and services subject to the balance billing protections of the law to count towards the maximum out-of-pocket limit. To account for this change, the 2027 AVC includes out-of-network emergency care in its spending and utilization data. The result is to moderately increase the AV of a plan with a given set of parameters, which means that plans must charge higher cost-sharing to meet the AV standards.<\/li>\n
      2. Eliminating the AVC filter for plans that exceed the maximum out-of-pocket caps<\/strong>. The AVC has long rejected plans that violate the ACA\u2019s limits on consumers\u2019 maximum out-of-pocket spending (MOOP). The NBPP proposed<\/a> that some bronze and all catastrophic plans be permitted to exceed the statutory MOOP caps. In light of this proposal, the new AVC omits the filter. This creates the risk that issuers could calculate AVs for and submit plans with higher AVs, even for metal levels not included in the NBPP proposal. Insurance regulators that have relied on this filter in the past may wish to confirm compliance going forward.<\/li>\n<\/ol>\n

        Responding to these changes. <\/strong>Insurance regulators can no longer rely on the AVC to assess whether plans meet the ACA\u2019s MOOP limits and may need to require insurers to separately establish their compliance.<\/p>\n

        States may also wish to comment on these changes to inform the development of the plan year 2028 AVC. Under rules finalized in the 2026 NBPP<\/a>, CMS does not accept comments on the AVC before finalizing it. CMS releases a final version, and then comments can be submitted any time and are considered for the following year. As a result, stakeholders may still comment on the changes made to the 2027 AV. Given the important effects of these changes on affordability, state officials may wish to comment in the months ahead<\/p>\n

        \n

        [1]<\/a> The authors would like to thank Matthew Fiedler and Lindsey Murtagh for helpful comments on drafts of this piece. The views expressed here do not necessarily reflect the views of the Urban Institute, Georgetown University, or their funders.<\/p>\n

        \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

        Jason Levitis, Urban Institute, and Sabrina Corlette, Georgetown CHIR[1] On February 26, 2026, the Centers for Medicare and Medicaid Services (CMS) released the actuarial value calculator (AVC) for 2027 and a document explaining the methodology. The AVC is a tool published annually that measures the actuarial value (AV) of plans in the individual and small […]<\/p>\n","protected":false},"author":26,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[885,2],"class_list":["post-19549","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-commercial-insurance","tag-shvs"],"acf":[],"_links":{"self":[{"href":"https:\/\/shvs.org\/wp-json\/wp\/v2\/posts\/19549","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/shvs.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/shvs.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/shvs.org\/wp-json\/wp\/v2\/users\/26"}],"replies":[{"embeddable":true,"href":"https:\/\/shvs.org\/wp-json\/wp\/v2\/comments?post=19549"}],"version-history":[{"count":8,"href":"https:\/\/shvs.org\/wp-json\/wp\/v2\/posts\/19549\/revisions"}],"predecessor-version":[{"id":19557,"href":"https:\/\/shvs.org\/wp-json\/wp\/v2\/posts\/19549\/revisions\/19557"}],"wp:attachment":[{"href":"https:\/\/shvs.org\/wp-json\/wp\/v2\/media?parent=19549"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/shvs.org\/wp-json\/wp\/v2\/categories?post=19549"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/shvs.org\/wp-json\/wp\/v2\/tags?post=19549"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}