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By Sara Hansard
States should be able to approve health plans that don’t comply with all of Obamacare’s coverage requirements as long as basic standards are met, Ohio Gov. John Kasich (R) said Sept. 8.
“You shouldn’t have to comply with every one of the essential health benefits,” Kasich said at a talk with Colorado Gov. John Hickenlooper (D) on a bipartisan plan endorsed by eight governors to stabilize the troubled individual health insurance markets. For healthy young people, who are under-represented in the Obamacare exchanges, catastrophic coverage and tax-advantaged health savings accounts are “a definition of comprehensive care,” he said.
Congress needs to pass legislation to stabilize the individual markets in the next few weeks to try to entice insurers to remain in the Affordable Care Act exchanges and to lower spiking premiums. The plan advanced by the governors includes provisions many say are needed, such as funding to cover reductions insurers are required to make in out-of-pocket expenses for low-income people, but Republicans are calling on Democrats to agree to give states more latitude to experiment with changes in the law.
The Senate Committee on Health, Education, Labor and Pensions (HELP) is holding hearings on stabilizing the individual markets, and there is general consensus among Democrats and Republicans that, in addition to funding the cost-sharing reduction payments, an ACA reinsurance plan to cover high-cost claims should be extended, and states should be given more flexibility to make changes under the Section 1332 state innovation waiver provision of the law.
But disagreements remain, including over whether the cost-sharing reduction payments should be appropriated by Congress beyond 2018. A federal district court in 2016 ruled in favor of the House, which had sued the Obama administration for making the payments with a congressional appropriation. The Trump administration has continued the payments, but President Donald Trump threatened to stop them if Congress doesn’t enact changes to the ACA.
If the cost-sharing reductions aren’t funded, actuaries have estimated that premiums would have to rise about 20 percent just to cover the cost of providing the cost-sharing reductions, in addition to medical inflation.
Hickenlooper called for extending the cost-sharing payments beyond 2018.
“Let’s go through 2019 so that insurance companies can know what they can rely on,” he said at the forum sponsored by the Center for American Progress and the American Enterprise Institute.
Insurers must start planning premiums for 2019 early in 2018, and if the payments are only funded for the 2018 plan year “then we’re right back where we were six months from now,” he said.
The deadline set by the Department of Health and Human Services for insurers to decide whether to participate in the 2018 exchanges is Sept. 27, and open enrollment is scheduled for Nov. 1 through Dec. 15.
Kasich defended the ACA’s individual mandate for now. However, he said an alternative advanced by Republicans requiring people to have continuous coverage or pay a penalty when they do enroll should be allowed for states that want it. The mandate requires people to have qualified coverage or pay a penalty.
“Ultimately we would like to design our own plan,” Kasich said, referring to state governments. States should be allowed to continue operating under the ACA or “make some changes within guardrails” to provide consumer protections, he said. “The guardrails are important” to ensure that people have adequate coverage, he said.
How much latitude states would be given to make changes to the ACA is up in the air.
Section 1332 allows states to get HHS approval to make major changes to the law, including waiving the individual and employer mandates and altering requirements for qualified health plans, essential health benefits, subsidies, and exchanges. The law requires that the coverage provided must be at least as comprehensive and affordable as ACA coverage, it must cover a comparable number of residents, and the states’ plans don’t increase the federal deficit.
Democrats don’t want any changes that would reduce consumer protections. Most of what the eight governors focused on regarding changes to Section 1332 “is the process” by which waivers are granted, Hickenlooper said.
At the Senate HELP hearings, insurance regulators and governors suggested that a six-month waiting period to receive the waivers be shortened, that governors or insurance regulators be allowed to apply for them without state legislature approval, and that automatic approval be given to waiver applications that are substantially similar to applications approved for other states.
Twenty-three states are working on applying for the waivers, and Alaska and Hawaii have received them, Senate HELP Committee Chairman Lamar Alexander (R-Tenn.) said at the hearings held Sept. 6-7.
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