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By Sara Hansard
Congress should allow health savings account funding for low-income people and let states integrate federal funds for Medicaid and Obamacare exchanges, an influential bipartisan group of health-care leaders said Aug. 9.
The group’s proposals included those two conservative ideas as well as a call for Congress to appropriate cost-sharing reduction subsidies to cover out-of-pocket health-care expenses for low income people, which industry stakeholders have insisted are necessary to stabilize the Affordable Care Act marketplaces in 2018.
Members of the group said they represent a full range of views and that they will reach out to Congress and the Trump administration to achieve bipartisan agreement. The House passed legislation to repeal much of the ACA in May, but Senate Republicans were unable to move a repeal through Congress.
The group doesn’t include members of Congress, the administration or health-care stakeholder groups such as health insurers, doctors, hospitals or consumer groups. Still, “this is the first meaningful incremental package that has been developed by folks who are trying to represent bipartisan concerns,” Ron Pollack, founding executive director of the liberal group Families USA, said on a telephone press conference.
The ACA exchange plans have attracted older, sicker enrollees without getting enough young healthy people to sign up. Early indications are that premiums may rise sharply in 2018 after big increases in 2017. Numerous insurers, including Blue Cross Blue Shield-affiliated Anthem Inc., have pulled back from some of the money-losing exchange markets.
A federal district court ruled in 2016 that the cost-sharing reduction subsidies were being paid illegally to health insurers without a congressional appropriation, and the Trump administration has been distributing the subsidies on a monthly basis since taking over in January. However, President Donald Trump has threatened to stop making the payments as a way to push Congress to pass legislation altering the ACA.
Health insurers and Democrats have called for Congress to appropriate the payments, estimated by the Congressional Budget Office at $7 billion in 2017 and $10 billion in 2018. Without the subsidies for people with incomes from 100 percent to 250 percent of the federal poverty level, premiums would have to rise an additional 20 percent just to cover the cost of providing them as required by the ACA, insurers have said.
The bipartisan group agreed “that Congress should appropriate funding for the cost-sharing reduction payments,” rather than continuing administrative action “to remove ambiguity and to create more certainty and predictability for the insurance markets,” John McDonough, a professor at Harvard University’s School of Public Health who supports the ACA, said on the press call.
Congress should encourage the Department of Health and Human Services “to fully and rigorously implement the ACA risk adjustment mechanism” and give states wider latitude to tailor risk adjustment methods for their own markets,” McDonough said.
The ACA’s risk adjustment provision requires insurers that cover healthier enrollees to make payments to insurers that cover less healthy enrollees, but new, smaller plans have had to make large payments to large, established plans under the provision, making it more difficult for new plans to be successful in the exchange market.
Congress also should encourage other state efforts to balance risk in the markets, including temporary reinsurance plans to cover high-cost claims, McDonough said. Alaska is the first state that has received Department of Health and Human Services approval to adopt a reinsurance plan, which will lower premiums in the state’s exchange.
“The federal government needs to act quickly to address the needs of counties without any participating health insurance plans for 2018,” McDonough said. He cited a proposal made by Timothy Jost, a retired professor at Washington and Lee University Law School, to allow people in “bare” exchanges to enroll in plans offered through the Federal Employees Health Benefits Program as a possible solution.
Nationwide, 17 counties containing about 9,600 people are projected to have no issuers in the 2018 exchanges, according to an Aug. 9 announcement from the Centers for Medicare & Medicaid Services.
States should be encouraged to explore alternatives to the ACA’s individual mandate using the law’s state innovation waiver provision, McDonough said. The unpopular individual mandate requires people to buy qualified coverage or pay a penalty. Congressional Republicans included a requirement in their legislative proposals that people keep continuous coverage or pay a one-year surcharge as a way to encourage healthier people to buy coverage.
Congress also should act quickly to provide full funding for the Children’s Health Insurance Program and continue funding for community health centers through 2019, McDonough said. Funding for those programs ends after September.
The group agreed that the expansion of health savings accounts “and their use by consumers and employers—including situations where you would use HSA funds for premium payments” could be an improvement in the U.S. health-care system, according to Lanhee Chen, director of domestic policy studies at Stanford University and former policy director for Republican presidential candidate Mitt Romney in 2012. Pre-funded HSAs should be made available to lower-income people who choose to enroll in high-deductible health plans, which typically have lower premiums.
Conservatives have talked about using HSAs and high-deductible plans as a way to use market forces to rein in high U.S. health-care spending for some time, Chen said. Broadening the use of HSAs should be encouraged “if for nothing else but to be used as a trust-building step across the partisan divide,” he said.
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