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By Alex Ruoff
Don’t expect Congress to return in September with big ideas on improving Obamacare. The mantra for health insurance market fixes will be: simple and narrow.
Lawmakers told reporters they want bipartisan legislation they can pass in mere weeks that will lower insurance premiums and increase competition in 2018. This means the bill will be narrowly tailored: billions of dollars for insurers who cover some of the poorest Americans, and the loosening of some ACA insurance regulations.
“It’s going to be very focused, maybe just CSRs and some other ideas that have bipartisan support,” Sen. Bill Cassidy (R-La.) told Bloomberg BNA, referring to cost-sharing reduction payments, money the government pays insurers to reduce insurance costs for some Americans.
House lawmakers have discussed altering the ACA’s employer mandate so that far fewer companies would be required to extend health benefits to their employees, lifting the impending tax on medical devices and creating a federal fund to help states reduce the cost of health services for people with expensive health conditions.
But, senators want to pass at least one quick fix for the individual health insurance market and committee leaders want to avoid thorny policy issues associated with changing the health law’s coverage rules. Lawmakers may try to write several small bills, some of which could move with a federal spending bill or funding for the Children’s Health Insurance Program in September, according to a health lobbyist.
Congress will be on a tight deadline to pass a market stabilization bill: insurers in August will submit their final requests for setting premiums on the federal health insurance exchange and will sign final agreements to participate in most exchanges by Sept. 27.
To influence rates for 2018, lawmakers will need to pass legislation before October, health policy experts told Bloomberg BNA.
After the Republican effort to repeal the Affordable Care Act failed in July, the heads of the Senate Health, Education, Labor and Pensions Committee announced plans to hold hearings to design legislation to boost insurer participation in the individual health insurance market. HELP Committee Chairman Sen. Lamar Alexander (R-Tenn.) has said he wants a one-year appropriation of CSR payments, something his House counterpart has supported as well.
However, some conservative see the payments as bailouts for the insurance industry and the Trump administration hasn’t publicly announced plans to keep paying them.
President Donald Trump has repeatedly threatened to halt these insurer payments, which would prompt most insurers to raise premiums, in hopes of convincing Democrats to support an ACA repeal bill.
Trump can choose to stop the payments because House Republicans won a lawsuit claiming they were never properly appropriated. The Obama administration appealed the ruling, but that appeal is now being led by the Trump administration.
The uncertainty about the future of cost-sharing payments prompted many health insurers to file two rate requests with state insurance commissions this year: one if the payments are made and another, much higher one, if they’re not, Matthew Fielder, a fellow with the Brookings Institution, told Bloomberg BNA Aug. 7.
If Congress approves them, the Trump administration would have no choice but to make the payments, estimated at nearly $10 billion in 2018, he said. Even if the legislation becomes law after the Sept. 27 deadline, the federal government can adjust premiums, Fielder said.
“If it’s clear Congress is on a path to passing something, CMS could be flexible there,” he said, referring to the Centers for Medicare & Medicaid Services, responsible for overseeing the federal marketplace.
By October, though, Fielder said, rates must be locked in for 2018.
Approving a short-term extension of the cost-sharing payments wouldn’t immediately lower health insurance premiums, he said, but it would mean premiums wouldn’t increase as much in 2018.
The cost-sharing reduction payments go to insurers for mid-level plans sold to low-income Americans and come with requirements that limit the out-of-pocket costs for beneficiares with these plans. More than 6.4 million people eligible to benefit from these payments were enrolled in plans in 2016, according to the CMS.
Democrats are expect to push for a multi-year approval of the payments. Sen. Chris Murphy (D-Conn.) told reporters a short-term approval “won’t be a solution for long-term issues.”
Insurers have asked lawmakers to make the payments permanent.
Beyond cost-sharing reductions, lawmakers are considering two ACA fixes long supported by the insurance industry: a new reinsurance program and changes to the health law’s risk-adjustment program.
The reinsurance program could simply be a fund to subsidize the cost of insuring the sickest Americans, Dan Mendelson, president of the consulting firm Avalere Health, told Bloomberg BNA.
Changing the risk-adjustment rules for insurers, on the other hand, would be an end-around the Trump administration, he said. The ACA’s risk-adjustment program is meant to give money from insurers that are profiting on the individual market to those who aren’t profiting.
The CMS sets to the rules for risk adjustment, but lawmaker could mandate changes for the program, to better compensate smaller insurers and those with extremely costly beneficiaries, Mendelson said.
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