Cost-Sharing Subsidies Needed Despite Health Insurance Market Rule

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By Sara Hansard

Health insurers such as Anthem Inc. are likely to pull out of Obamacare exchanges without congressional intervention, regardless of what’s in a rule under White House review.

That was the assessment of Katie Allen, executive director of the Council for Affordable Health Coverage (CAHC), which represents employers, pharmaceutical companies, insurers, patient groups and physician organizations. The Office of Management and Budget March 31 received for review the Department of Health and Human Services’ final rule (RIN:0938-AT14), which is intended to help stabilize individual and small group health insurance markets.

Health insurers probably will be happy with provisions in the rule that should make it less likely that people will wait until they are sick to sign up for coverage, Allen told Bloomberg BNA April 3. But without congressional action, the loss of $9 billion in cost-sharing reductions for the lowest-income exchange participants would result in large areas of the country lacking individual health insurers on or off the Obamacare exchanges, she said.

Stop Cost-Sharing Lawsuit

Five Democrats on the Senate Health, Education, Labor and Pensions Committee called on President Donald Trump April 3 to halt a lawsuit led by House Republicans that could result in ending the cost-sharing subsidies.

“We remain concerned that your Administration has still not provided certainty to insurers and consumers that you will protect the cost-sharing subsidies” provided under the Affordable Care Act, said the letter, which was signed by Sens. Tammy Baldwin (D-Wis.), Elizabeth Warren (D-Mass.), Sheldon Whitehouse (D-R.I.), Margaret Wood Hassan (D-N.H.) and Chris Murphy (D-Conn.).

“Your Administration and Congressional Republicans have made no effort to halt the lawsuit House v. Price that would take away these vital cost-sharing subsidies from the more than 6 million Americans who rely on them today,” the letter said. Instead, the administration and House Republicans delayed action on the lawsuit until May 22, it said.

“We stand ready to work on improvements to the law that would reduce costs for individuals and improve the stability of the market,” the letter said. “But, we cannot work together on commonsense reforms without a strong commitment from your Administration to do no further harm and to halt efforts that have already begun to undermine access to affordable coverage.”

Broker Access to HealthCare.gov

The HHS is likely to issue guidance this week or the week of April 10 that would make it easier for private web brokers such as eHealth Inc. to sign up consumers using the federal HealthCare.gov website, Allen said. Consumers who want to use private online entities to sign up for coverage must leave the web brokers’ websites, complete eligibility determination applications on HealthCare.gov and then return to the online web service to complete the transaction, she said.

Such a direct enrollment agent pathway was effective in 2015 and 2016, but language included in the final Notice of Benefit and Payment parameters issued by the Obama administration for 2017 effectively put a halt to the practice, according to a March 17 letter from Reps. Marsha Blackburn (R-Tenn.) and Markwayne Mullin (R-Okla.) to HHS Secretary Tom Price. Blackburn and Mullin urged Price to reverse the prohibition on the direct enrollment agent pathway in the market stabilization rule.

The final market stabilization rule isn’t expected to address the direct enrollment agent pathway, Allen said. But the HHS may address the issue before the spring national meeting of the National Association of Insurance Commissioners in Denver April 8-11, she said. Insurers will be starting to file their 2018 rates in the next few weeks, and the administration wants to resolve the issue before then, she said.

Anthem’s Comment

Several large national insurers, including UnitedHealth Group Inc., Aetna Inc. and Humana Inc., as well as some Blue Cross Blue Shield plans, have pulled back from the exchanges because plans sold on them lost money as enrollees proved to have higher average claims than expected.

Anthem Inc., a Blue Cross Blue Shield plan, has 839,000 exchange customers in 14 states, spokeswoman Jill Becher told Bloomberg BNA in an email April 3.

“While we have performed better than many of our competitors, it is increasingly difficult to remain in the exchange market under its current structure,” Joseph Swedish, chairman, president and chief executive officer of Anthem, said in a March 9 letter to House Energy and Commerce Committee Chairman Greg Walden (R-Ore.) and House Ways and Means Committee Chairman Kevin Brady (R-Texas).

“Without significant regulatory and statutory changes to the individual market, we will begin to `surgically extract’ Anthem from that market beginning in 2018,” Swedish said in the letter.

Other provisions in the market stabilization proposed rule would require verification before people are allowed to sign up for exchange coverage outside of normal enrollment periods, allow insurers to collect unpaid premiums for prior unpaid coverage and shorten the 2018 open enrollment period for the individual market by about half to Nov. 1 through Dec. 15. Health insurers have called for those changes in the expectation that fewer people would wait until they are sick to enroll and they would be able to recoup some losses from unpaid premiums.

To contact the reporter on this story: Sara Hansard at shansard@bna.com

To contact the editor responsible for this story: Brian Broderick in Washington at bbroderick@bna.com

For More Information

The market stabilization proposed rule (RIN:00938-AT 14) is at https://www.gpo.gov/fdsys/pkg/FR-2017-02-17/pdf/2017-03027.pdf.

The Congressional Budget Office's Federal Subsidies for Health Insurance Coverage for People Under Age 65: Tables From CBO’s March 2016 Baseline is at https://www.cbo.gov/sites/default/files/recurringdata/51298-2016-03-healthinsurance.pdf.

The April 3 letter from Senate HELP Democrats to President Trump on the cost-sharing subsidy lawsuit is at https://www.baldwin.senate.gov/imo/media/doc/Letter%20to%20Trump%20Re%20Cost%20Sharing.pdf.

Rep. Marsha Blackburn and Rep. Markwayne Mullin's letter to HHS Secretary Tom Price is at http://src.bna.com/nBg.

The March 9 letter from Anthem CEO Joseph Swedish to two House committee chairmen is at https://www.antheminc.com/wellpoint/groups/wellpoint/documents/wlp_assets/pw_g302344.pdf.

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