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By Sara Hansard
President Donald Trump must support congressional efforts to stabilize the faltering Obamacare markets to ensure legislation is passed, the former Democratic governor of Kentucky and a Democratic congressman said Sept. 14.
“If he would grab ahold of this, in any form or fashion, and publicly put the leadership of the House and Senate on the spot, I think we might get something done,” former Kentucky Gov. Steve Beshear (D) said Sept. 14 at a policy conference sponsored by the Politico Pro news service. Rep. Frank Pallone Jr. (D-N.J.), the ranking Democrat on the House Energy and Commerce Committee, agreed.
Efforts by Senate Committee on Health, Education, Labor and Pensions (HELP) Chairman Lamar Alexander (R-Tenn.) and ranking member Patty Murray (D-Wash.) to pass a narrow, bipartisan bill aimed at stabilizing the individual health insurance markets before the end of the month are up in the air. Democrats and many Republicans agree Congress should fund out-of-pocket subsidies for low-income people under the Affordable Care Act, but Republicans want to give states more flexibility in setting plan designs than Democrats want.
Individual market premiums are likely to spike in 2018 as more insurers leave the market due to losses covering a sicker-than-expected population. Providing more certain funds for the exchanges may reduce some premium increase requests, and more insurers may stay in the markets or come back in, market analysts say. Insurers have until Sept. 27 to sign 2018 contracts in the 39 states using the federal HealthCare.gov exchange.
“I think that we have a good chance of passing a bipartisan bill in both houses that deals with the cost-sharing subsidies so they’re essentially permanent, that does some kind of reinsurance so we get more carriers and more competition in the marketplace, and that guarantees that we have a level of outreach through ads or navigators,” Pallone said.
But Pallone said the Trump administration should “stop the sabotage.” He criticized the Department of Health and Human Services for cutting the advertising budget for the 2018 exchange open enrollment period from $100 million to $10 million and for cutting the budget for navigators, who assist people in enrolling, by 39 percent from the $62.5 million allocated for 2017.
The Senate HELP Committee held four hearings in September on stabilizing the individual market at which a bipartisan group of state insurance commissioners, governors, and industry stakeholders called for funding cost-sharing reduction subsidies to cover out-of-pocket costs for low-income people. However, it isn’t clear whether a stabilization bill would fund the subsidies for longer than 2018.
The Trump administration has been approving the cost-sharing reductions on a monthly basis, and Trump has threatened to stop approving them unless Congress acts to repeal and replace the ACA. It takes health insurers about 18 months to price their products, Marilyn Tavenner, president and chief executive officer of America’s Health Insurance Plans, said at the conference.
“We need to understand more than 30 days at a time how to price a product,” Tavenner said. “We need a two-year frame of reference.” The Congressional Budget Office estimates that the subsidies would cost about $8 billion in 2018 and about $12 billion in 2019.
Insurers also need federal reinsurance funding to cover high-cost claims, Tavenner said. The ACA included a reinsurance program funded with $25 billion collected from fully insured and self-insured health plans from 2014 through 2016. The American Health Care Act ( H.R. 1628) passed in May by the House and the Better Care Reconciliation Act considered by the Senate included stabilization funds from the general Treasury that could be used for state reinsurance funds.
Tavenner also called for outreach funding for the 2018 exchange open enrollment, which is scheduled for Nov. 1 through Dec. 15. “Don’t cut the marketing. We need to market to these people. They’re hard to find,” she said.
But it will be difficult for Republicans to agree to “prop up the ACA,” which the GOP has been running against for the past seven years, Tevi Troy, who was deputy secretary of the HHS from August 2007 until January 2009 during the George W. Bush administration, said.
“Republicans really are looking for something that they can see as a substantive change,” providing more flexibility for governors to make choices about the level of benefits provided and the kind of plans that could be offered, Troy said. It isn’t clear that the plan Alexander and Murray are working on will meet that test, he said.
But, Pallone said, “One of the best things about the ACA was the essential benefits package,” which requires plans to cover 10 broad categories of care, including such things as emergency services, hospitalization, maternity care, and mental health and substance use disorder services.
Allowing plans to exclude some benefits to bring costs down is “not a cost savings. That’s just, you’re not getting covered,” Pallone said.
“We want people to have access to the essential health benefits,” but the underlying costs of health care need to be addressed, Tavenner said.
The health insurance industry is taking steps to bring costs down through value-based insurance models, such as accountable care organizations, which move away from fee-for-service and align costs with outcomes, she said.
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Information on the Politico Pro Policy Summit is at http://www.politico.com/live-events/pro-policy-summit.The Centers for Medicare & Medicaid Services's Aug. 31 announcement on Policies Related to the Navigator Program and Enrollment Education for the Upcoming Enrollment Period is at http://src.bna.com/sxZ.Information on Senate HELP Committee hearings is at https://www.help.senate.gov/hearings.The CBO's August report, The Effects of Terminating Payments for Cost-Sharing Reductions, is at https://www.cbo.gov/system/files/115th-congress-2017-2018/reports/53009-costsharingreductions.pdf. Table 3, Estimate of the Net Budgetary Effects of Terminating Payments for Cost-Sharing Reductions, includes estimates for cost-sharing outlays.Information on the American Health Care Act (H.R. 1628) is at https://www.congress.gov/bill/115th-congress/house-bill/1628.Information on the Better Care Reconciliation ACt is at https://www.budget.senate.gov/bettercare.Information on the ACA's essential health benefits requirement is at https://www.healthcare.gov/glossary/essential-health-benefits/.
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