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As ACA enrollment nears, administration keeps cutting federal support of the law

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https://www.washingtonpost.com/politics/as-aca-enrollment-nears-administration-keeps-cutting-federal-support-of-the-law/2017/10/05/cc5995a2-a50e-11e7-b14f-f41773cd5a14_story.html?utm_term=.b9039864660d

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For months, officials in Republican-controlled Iowa had sought federal permission to revitalize their ailing health-insurance marketplace. Then President Trump read about the request in a newspaper story and called the federal director weighing the application.

Trump’s message in late August was clear, according to individuals who spoke on the condition of anonymity to discuss private conversations: Tell Iowa no.

Supporters of the Affordable Care Act see the president’s opposition even to changes sought by conservative states as part of a broader campaign by his administration to undermine the 2010 health-care law. In addition to trying to cut funding for the ACA, the Trump administration also is hampering state efforts to control premiums. In the case of Iowa, that involved a highly unusual intervention by the president himself.

And with the fifth enrollment season set to begin Nov. 1, advocates say the Health and Human Services Department has done more to suppress the number of people signing up than to boost it. HHS has slashed grants to groups that help consumers get insurance coverage, for example. It also has cut the enrollment period in half, reduced the advertising budget by 90 percent and announced an outage schedule that would make the HealthCare.gov website less available than last year.

The White House also has yet to commit to funding the cost-sharing reductions that help about 7 million lower-income Americans afford out-of-pocket expenses on their ACA health plans. Trump has regularly threatened to block them and, according to an administration official who was not authorized to speak publicly, officials are considering action to end the payments in November.

The uncertainty has driven premium prices much higher for 2018. A possible move by the Treasury Department to ease the requirement that most Americans obtain coverage could further erode a core element of the law.

On Friday, Sen. Margaret Wood Hassan (D-N.H.) called on the administration to abandon its “attempts to sabotage health care markets and raise health care costs for millions.” Such efforts, warn health advocates as well as state and local officials, will translate into more uninsured Americans.

“In Ohio, the Trump administration has already inflicted the damage,” said Lisa Hamler-Fugitt, executive director of the Ohio Association of Foodbanks. After its nearly $1.7 million enrollment-assistance grant was cut 72 percent last month, the group decided it no longer could effectively participate. “We are past the point of no return on this,” Hamler-Fugitt said.

HHS has told its regional administrators not to even meet with on-the-ground organizations about enrollment. The late decision, which department spokesman Matt Lloyd said was made because such groups organize and implement events “with their own agenda,” left leaders of grass-roots organizations feeling stranded.

“I don’t think it’s too much to ask the agency tasked with outreach and enrollment to be involved with that,” said Roy Mitchell, executive director for the Mississippi Health Advocacy Program, which receives no federal funding for its ACA efforts. “There’s money for HHS to fly around on private jets, but there’s not money and resources to do outreach in Mississippi.”

Administration officials make no apologies for actions scaling back federal support for the ACA, also known as Obamacare. Trump, Vice President Pence and those carrying out the law at different agencies take most every opportunity to claim that it is failing. HHS Secretary Tom Price’s abrupt resignation Friday, prompted by the furor over his use of expensive chartered planes for work trips, is not expected to shift this overall approach.

After failing to repeal and replace the Affordable Care Act, Republican leaders said it will “implode.” Health-care experts disagree, saying the ACA is stable under current law — but President Trump and congressional Republicans could change that. (Daron Taylor/The Washington Post)

“Obamacare has never lived up to enrollment expectations despite the previous administration’s best efforts,” Lloyd said in an email last week. “The American people know a bad deal when they see one, and many won’t be convinced to sign up for ‘Washington-knows-best’ health coverage that they can’t afford.”

Trump and his aides also are looking for ways to loosen the existing law’s requirements, now that the latest congressional attempt to repeal it outright has failed. The Treasury Department may broaden the ACA’s “hardship exemption” so that taxpayers don’t face costly penalties for failing to obtain coverage, a Republican briefed on the plan said. That is sure to depress enrollment among the younger, healthier consumers whom insurers count on to help buffer the health-care costs of sicker customers.

“We should fully expect the Trump administration to take a more activist route to deal with Obamacare, given the inability of Congress to move through with a repeal-and-replace bill,” said Lanhee Chen, a research fellow at Stanford University’s Hoover Institution.

While the law’s open enrollment period has attracted the most public attention, a more obscure battle within the administration over several states’ proposed changes for their marketplaces speaks volumes about the president’s approach to the law.

It was a Wall Street Journal article about Iowa’s request that provoked Trump’s ire, according to an individual briefed on the exchange. The story detailed how officials had just submitted the application for a Section 1332 waiver — a provision that allows states to adjust how they are implementing the ACA as long as they can prove it would not translate into lost or less-affordable coverage.

Iowa’s aim was to foster more competition and better prices. The story said other states hoping to stabilize their situations were watching closely.

Trump first tried to reach Price, the individual recounted, but the secretary was traveling in Asia and unavailable. The president then called Seema Verma, administrator of the Centers for Medicare and Medicaid Services, the agency charged with authorizing or rejecting Section 1332 applications. CMS had been working closely with Iowa as it fine-tuned its submission.

State Insurance Commissioner Doug Ommen has repeatedly described the “Iowa Stopgap Measure” as critical to expanding marketplace options there. The plan would abolish the ACA exchange there and convert consumer subsidies into a type of GOP-styled tax credit. New financial buffers would help insurers handle customers with particularly high medical expenses.

Without the measure, “over 20,000 middle class farmers, early retirees and self-employed Iowans will likely either go uninsured or leave Iowa,” Ommen warned in a Sept. 19 statement. Those who sign up for 2018 exchange coverage face premium rate increases of 57 percent on average from the single insurer participating.

Some administration officials are still pressing for the waiver to be granted, according to interviews with several Republicans. The HHS spokesman confirmed last week that Iowa’s application “has been deemed complete and is currently under review” but did not address the president’s directive on the matter.

Eliot Fishman oversaw such waivers at CMS during the previous administration and said in an interview that President Barack Obama weighed in on those decisions only in “unusual” cases” toward the end of the process.

“Things that are tough calls typically go to the president, but they go with a [staff] recommendation that often carries a great deal of weight,” said Fishman, now senior director of health policy for the liberal health-care advocacy group Families USA.

Iowa is not the only red state to chafe at the administration’s unwillingness to allow more flexibility.

On Friday, Oklahoma sent a letter to Price and Treasury Secretary Steven Mnuchin saying it was withdrawing its federal waiver request because administration officials had not provided an answer “after months of development, negotiation, and near daily communication over the past six weeks.”

“While we appreciate the work of your staff, the lack of timely waiver approval will prevent thousands of Oklahomans from realizing the benefits of significantly lower insurance premiums in 2018,” wrote Terry Cline, the state’s health secretary.

In at least one case, CMS has approved a waiver in a way that upended a state’s plan to maximize health coverage for its residents. Minnesota applied to CMS for permission to establish a reinsurance program, which can lower premiums by giving insurers a guarantee that they will have limited financial exposure for customers with particularly high medical expenses. The agency informed Gov. Mark Dayton (D) on Sept. 22 that it would provide $323 million for the program since the lower premiums would mean savings to the federal government on subsidies to Minnesotans with ACA health plans.

But, Verma added, the federal government also would cut $369 million in funding for a separate program aimed at residents who earn between 138 percent and 200 percent of the federal poverty level and don’t qualify for the same subsidies.

Minnesota’s entire congressional delegation, Democrats and Republicans alike, issued a joint statement saying they were “disappointed that our state is facing a last-minute penalty” and “exploring possible paths forward.”

Sen. Patty Murray (Wash.), the top Democrat on the Health, Education, Labor and Pensions Committee, said Trump should devote time to forging a bipartisan agreement to stabilize the ACA marketplaces.

“If he is only interested in sabotaging the market, that is a dangerous road for him to ride, because he will own it,” she said.

With Affordable Care Act’s Future Cloudy, Costs for Many Seem Sure to Soar

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Health insurers are aggressively increasing prices next year for individual policies sold under the federal health care law, with some raising premiums by more than 50 percent.

By approving such steep increases for 2018 in recent weeks, regulators in many states appeared to be coaxing companies to hang in there, despite turmoil in the market and continuing uncertainty in Congress about the future of the law, the Affordable Care Act.

In Georgia, the state insurance commissioner, Ralph T. Hudgens, an outspoken critic of the law, often referred to as Obamacare, said the rates he approved would be up to 57.5 percent higher next year. The state had already lost Anthem, the large insurer that offers for-profit Blue Cross plans in several states, which left many markets in Georgia.

“Obamacare has become even more unaffordable for Georgia’s middle class,” Mr. Hudgens said in a statement. “I am disappointed by reports that the latest Obamacare repeal has stalled once again and urge Congress to take action to end this failed health insurance experiment.”

In Florida, the average rate increase will be about 45 percent, according to state regulators. And in New York, where officials said prices would still be below where they were before the law took effect, premiums were expected to increase by an average of about 14 percent. Many states have not made insurers’ rate increases public, and experts said the rise in costs for consumers could run from 10 percent to nearly 60 percent.

There are exceptions. Minnesota, which sought a federal waiver to address the high cost of premiums, said this week that prices for plans sold on the state exchange there would remain stable or drop significantly in 2018.

Those who qualify for federal subsidies, a group that accounts for about 85 percent of the roughly 10 million people who buy insurance through the marketplaces created under the health law, will largely be shielded from the higher prices.

Regulators in Florida and New York said that residents of those states who qualified for the most generous subsidies could see lower prices next year, depending on which plan they buy. In some places, the least expensive plans could become free after customers apply their subsidies. (Deficit hawks will probably complain about the higher federal outlays for subsidies.)

People who earn too much to qualify for financial assistance will feel the brunt of any increases. Because many insurers raised prices most sharply on plans that are attractive to people who receive the most generous subsidies, those unable to get subsidies may have to shop for plans that are not affected or look beyond their state marketplaces for lower-priced options.

The final prices and policies available for all plans may not be public until Nov. 1, leaving many consumers confused about coverage costs as a shortened period of open enrollment for health care insurance under the Affordable Care Act begins.

The insurance companies have defended the rate increases, saying they were unavoidable under the current circumstances. After the latest Senate effort to repeal the health law collapsed, insurers still have no commitment about whether the government will continue to allocate millions of dollars in critical financing. Some lawmakers have renewed talk of a bipartisan solution to guarantee that the money keeps flowing, but there is no resolution — forcing insurers to set rates without an agreement.

The Trump administration has sent mixed signals about whether it will enforce key elements of the law like the individual mandate, which encourages healthy people to sign up for insurance or be charged a tax penalty. If insurers cannot spread out the cost of coverage for people with high medical bills over a large enough group, they may be inclined to raise premiums even higher.

“We’re all pricing up for it,” said Dr. Martin Hickey, the chief executive of New Mexico Health Connections, one of the few remaining insurance start-ups created by the federal law. New Mexico Health Connections recently expanded an existing partnership with Evolent Health, a public company, which will provide additional capital.

In New Mexico, the average rate increase for plans sold on the state marketplace is about 30 percent. “Half of that increase is due to the uncertainty in Washington and the inability to lead,” said John G. Franchini, the state insurance regulator. The four insurers selling policies in the state marketplace are offering more types of plans.

After a slow start, many insurers have been making money in the individual market for the past year or so. Premiums have generally risen faster than underlying medical expenses, according to a recent analysis by the research firm Mark Farrah Associates. With rates set to climb much higher next year, insurers could see profits rise significantly too.

But questions about the insurance market’s future make it nearly impossible to come up with accurate projections. Regulators and actuaries said that the higher rates reflected a conservative approach as a cushion against potentially sizable losses.

“It’s very hard for a regulator to deny those rate increases when we can take a look at their bottom line and can tell they can’t continue if they can’t keep their head above water,” said Mike Kreidler, Washington State’s insurance commissioner and a supporter of the health law.

Actuaries said that the higher rates were justified. The insurers “are really struggling,” said Kurt Giesa, a partner with Oliver Wyman, a consultant that has worked with regulators to review rates. “They have been working hard to adapt to what they are faced with right now,” he said.

And although they have been raising prices aggressively, “it doesn’t mean that insurers couldn’t lose money,” said Deep Banerjee, an industry analyst for Standard & Poor’s who has been following the improved profitability of Blue Cross plans. “The trend has been improving but the market is still fragile,” he said.

The uncertainty over paying insurers for the so-called cost-sharing reductions, which limit out-of-pocket medical costs for people with low incomes, remains problematic. Most state regulators let insurers set prices to cover the cost of the required reductions, but several did not.

The Trump administration has been paying insurers on a month-to-month basis; a legal challenge over the payments by House Republicans has left the issue in limbo.

In the states that did not allow insurers to account for a loss of federal funding, the rates would be “inadequate” if that funding went away, said David M. Dillon, a fellow with the Society of Actuaries who has also worked with several state regulators. They “are just hopeful that something can be fixed later on,” he said.

Two insurers pulled out of the markets at the last minute because of the confusion. Medica stopped offering coverage in North Dakota next year because regulators said insurers had to assume the financing would continue; Anthem abandoned the Maine marketplace because the money had not been guaranteed.

Mr. Kreidler of Washington approved two sets of rates but is only allowing insurers to charge the lower set. If the government stops paying for the subsidies, he said, “It’s going to be a real challenge.”

If Congress or the administration decide to keep providing the subsidies, prices will be higher than necessary if insurers raised their rates to make up for a loss of the funding. “We’ll see if we can lower those rates with the permission” of the federal agency responsible for overseeing the marketplace, Mr. Franchini of New Mexico said.

Some insurers think a decision on the cost-sharing money could come too late.

CareFirst, a Blue Cross insurer, offers plans in Virginia and Maryland. Virginia allowed CareFirst to assume a lack of financing; Maryland regulators prohibited insurers from setting higher rates based on a loss of subsidies.

“You have this unbelievable contradiction,” said Chet Burrell, CareFirst’s chief executive. In Maryland, where the company is losing money on individual policies, it could sustain much deeper losses if the federal money stopped coming in.

“I don’t think you can work it out,” he said. “The workout is you will have to eat it this year.”

Like other insurance executives, Mr. Burrell worries that the higher prices will eventually discourage too many healthy people from enrolling. In Maryland, he said, only one-third of those buying coverage are eligible for subsidies. Everyone else pays full price. The most popular type of plan could come with premiums of $373 a month to $686 a month for a 40-year-old.

“Given the size of the rate increases, we think healthier people will continue to opt out of the risk pool,” he said, suggesting that would lead to rates being even higher in 2019. “If that occurs, then you’re in a death spiral,” he said, because as rates climb, more healthy people drop out, sending prices even higher. Mr. Burrell said he was working with regulators in Maryland to potentially create a fund that would help care for patients with the very high medical bills while possibly lowering overall premiums.

But even insurers in states that have allowed for the loss of funding are not sanguine.

“I think it’s going to be a stumbling in the dark next year because of all the uncertainties,” Dr. Hickey of New Mexico Health Connections said. The changing circumstances and inaction by Congress have forced insurers to raise rates and experiment with different plans for those who are not eligible for federal assistance.

“It’s almost like the beginning, again,” he said.

GOP gives ground in ObamaCare stabilization talks

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http://thehill.com/policy/healthcare/353671-gop-willing-to-give-ground-on-obamacare-subsidies

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Republicans are willing to provide insurers with two years of ObamaCare subsidies under a bipartisan market stabilization bill, according to the Senate Health Committee chairman.

Sen. Lamar Alexander (R-Tenn.) said continuing cost-sharing reduction subsidies for two years is a key part of the stabilization package he is trying to negotiate with Sen. Patty Murray (D-Wash.).

Alexander and Murray are continuing to try to rally Republicans and Democrats around a short-term plan to lower ObamaCare premiums in 2018 and 2019.

“The elements of that are continuing cost-sharing payments for two years and to give states meaningful flexibility in the types of policies they can write,” Alexander said Tuesday.

Alexander initially only wanted to fund the payments for one year, while Democrats were pressing for two years.

Republicans pulled the plug on the bipartisan talks when it appeared their last-ditch ObamaCare repeal bill was gaining momentum, but the change in Alexander’s position could be a sign that he and Murray are closing in on an agreement.

The White House has been making the cost-sharing payments on a monthly basis, all while President Trump has continued to threaten to cancel them in a bid to make ObamaCare “implode.”

While Alexander and Murray may be close, the future of the bipartisan fix is unclear.

Many other Senate Republicans, including Senate Finance Committee Chairman Orrin Hatch (R-Utah), are more skeptical of a deal to stabilize ObamaCare than Alexander is.

And the House and White House are also uncertainties.

Alexander said the talks are continuing, and he and Murray plan to meet later on Tuesday.

Asked whether GOP leadership is urging him to continue the talks, Alexander said he thinks they have more important things to worry about.

“Well, I’m telling them that I am continuing the talks. They have lots of other things to worry about today,” he said.

 

What’s Past Is Prologue: CBO’s Score for the House-Passed AHCA Reminds Us Why Insurance Markets Need Regulation

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http://www.commonwealthfund.org/publications/blog/2017/jun/why-insurance-markets-need-regulation

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The Trump administration has been arguing for months that the insurance market reforms of the Affordable Care Act (ACA) are not working and are even harming consumers. But four years of accumulated data on Americans’ experiences in a reformed individual market provides considerable evidence to the contrary. Americans’ ability to buy comprehensive health plans on their own has improved significantly since the reforms went into effect in 2014. Most people with marketplace plans are satisfied with them and have used their plans to get health care they couldn’t have obtained in the past. A majority of those eligible for subsidies have premiums and deductibles similar to those in employer plans. And while policy fixes are needed to improve affordability, as well competition in some areas of the country, the marketplaces were looking increasingly stable for both consumers and insurers at the beginning of this year.

It is actually the lack of certainty about the administration’s actions regarding the enforcement of the market reforms, rather than the reforms themselves, that are the primary source of the marketplace’s current problems. The importance of the ACA’s insurance market reforms were underscored last week in the Congressional Budget Office’s (CBO) analysis of the House-passed American Health Care Act (AHCA), the Republican’s ACA repeal-and-replace bill. The report included an assessment of an amendment that would allow states to undo some of the reforms. That assessment is a powerful illustration of why these reforms were needed in the first place.

The MacArthur Amendment Relaxes ACA Individual Market Reforms

In the week before the House vote in May, Representative Tom MacArthur sponsored an amendment to the AHCA that provided waivers for states that wanted to relax two major sets of ACA reforms:

  • The requirement that insurance companies sell policies that cover a standard set of health benefits similar to those in employer-based coverage
  • The ban that prevents insurance companies from charging people more based on their health.

Under the first waiver, states could let insurers eliminate coverage for many services, significantly driving up out-of-pocket costs for people who need these services. Under the second waiver, states could allow insurers to price, or underwrite, people’s insurance based on their health if they applied for a plan and had a gap in their insurance of 63 days or more. States with the waivers would be required to establish high-risk pools or reinsurance programs to make coverage affordable for people who had higher premiums as a result. They could draw funds from the AHCA’s Patient and State Stability Fund, a pool of $10–$15 billion a year over 2018–2026 that was supplemented for various purposes through amendments.1

CBO Estimated About Half the U.S. Population Lives in States That Would Request Waivers

If there were doubts about whether any states would apply for the waivers, the CBO had some news: half the U.S. population could live in states that would use these waivers to begin deregulating their individual insurance markets. The basis for their estimate? In part, they considered state approaches to their individual markets prior to the ACA. States that had previously allowed insurers the freest rein in consumer coverage denials, rating on health, and flexibility in what services they would cover were expected to loosen the reins again.

CBO also expected that states that sought the waivers would implement them in different ways. Some states might modestly deregulate their markets while others might make more dramatic changes. For example, some states might require insurers to cover a core set of benefits but allow them to exclude maternity or mental health services. Using 2014 data, RAND researchers have estimated that this could increase the costs to families of having a baby by $6,900 to $9,300 and the annual costs of mental health care by $1,300 to over $12,000. Other states might go a step further and let insurers determine the entire content of their benefit packages as they did in many states prior to the ACA, leaving many people with preexisting conditions stuck with the full cost of their care.

Likewise, CBO assumed that some states would take different approaches to reintroducing individual underwriting in their markets. Because healthy people would face lower premiums if they were rated on the basis of their health, they would have little incentive to maintain continuous coverage, since they would prefer the lower rate they would receive if carriers rated them on health. In order to keep healthy people in the community-rated risk pool (the one with both healthy and unhealthy enrollees), a state might only allow underwriting of people with health problems.

Other states might go whole hog and allow underwriting on health for everyone who had a coverage gap, regardless of their health status. These markets over time would begin to look like those of the pre-ACA past: markets segmented into pools where people in good health could find affordable plans and those with health problems were priced out of the market. The CBO concluded that the funds set aside for state high-risk pools for people with health problems were inadequate to make coverage affordable for people with preexisting conditions in these states.

What’s Past Is Prologue

Decades of experience with the individual market in the United States has shown that without considerable regulation the market simply cannot function for all those who rely on it. Allowing insurers in the past to price each individual’s policy according to their health penalized those who were the sickest and rewarded those who were the healthiest. The 35 states that tried to patch high-risk pools onto their individually rated markets and the ACA’s own transitional Preexisting Conditions Insurance Plan program left robust evidence that high-risk pools were expensive for states and the people who enrolled in them, left millions uninsured, and were ultimately unsustainable. States that had attempted to ban pricing based on health status (like New York and New Jersey) also experienced instabilitybecause the lack of premium subsidies and an individual mandate left their markets lopsided: too many people in poorer health without the balance provided by those in better health.  As a result, premiums soared.

In contrast, four years of experience with the ACA’s insurance market reforms demonstrates that it is possible for this market to offer affordable, comprehensive insurance to people with diverse health needs. In 2010, 60 percent of adults who tried to buy a plan in the individual market said that they found it very difficult or impossible to find one they could afford. By 2016, that number had fallen by nearly half, to 34 percent. While this rate leaves plenty of room for improvement, the substantial decline suggests that the U.S. has been headed in the right direction if private markets are the nation’s preferred path to universal coverage. But any future movement along this path will require the full commitment of the Trump administration and Congress to enforcing and improving the ACA’s reforms of our complex private health insurance markets.

ACA “Bare Counties”: Policy Options to Ensure Access Must Address Longer-Term Stability and Competition

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http://www.commonwealthfund.org/publications/blog/2017/sep/aca-bare-counties

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Continued uncertainty about federal funding for health plans is contributing to higher individual market premiums and insurer withdrawals in 2018. The danger that consumers in some regions wouldn’t have any coverage option next year seemed to subside when insurers in the affected states eventually agreed to broaden their participation. But with the September 27 deadline for deciding to participate in the Affordable Care Act (ACA) marketplaces fast approaching, Virginia officials announced an insurer withdrawal that may leave as many as 63 counties without coverage. At the same time, many more counties appear likely to have just one insurer offering marketplace coverage. The risk that any consumer might be without options for health coverage deserves the right response from policymakers.

Relief for Bare Counties?

The threat of counties without individual market insurers, known as “bare counties,” should be a real concern of policymakers. Even if consumers in all counties have a marketplace plan that gives them access to ACA subsidies, a single plan choice locks consumers into the plan that is available to them, not necessarily the one that best meets their needs. It also fails to foster competition on price and quality, and leaves state officials tasked with approving plans in a difficult position. Two proposals in the Senate would address bare counties, and although both might provide access to federal subsidies, each has significant side effects that are likely to negatively impact market stability and future plan choices.

The Health Care Options Act (S. 761), introduced earlier this year by Senator Lamar Alexander (R–Tenn.), would allow individuals who live in an area without a marketplace plan to qualify for premium tax credits — paid at year-end — to purchase coverage off of the marketplace, including coverage that doesn’t comply with ACA consumer protections. A second bill introduced by Senator Claire McCaskill (D–Mo.), the Health Care Options for All Act (S. 1201), would allow individuals living in a bare county to purchase coverage through the District of Columbia marketplace, where members of Congress and their staff obtain coverage.

By allowing tax credits to be used for coverage that does not meet ACA requirements, the Alexander bill will likely encourage insurers to sell skimpy policies and healthy individuals to enroll in them. Noncompliant policies would have far lower premiums than compliant ones, which, because of the ACA, cannot discriminate based on an individual’s health status. Consequently, insurers that choose to sell in the off-marketplace market likely will hike their premiums for comprehensive coverage to account for the likelihood of enrolling fewer and less healthy individuals. Indeed, they may find that offering such coverage is unsustainable, particularly given that they would still be able to capture healthy, subsidized enrollees through the sale of noncompliant plans.

In contrast, the McCaskill bill would allow consumers to continue to have access to the ACA’s upfront premium and out-of-pocket help and would limit federal financial help to marketplace plans that meet critical consumer protections. However, by requiring insurers selling in the District of Columbia’s small business marketplace to offer individual market coverage to out-of-state consumers, many of whom live in rural areas and are likely to be higher-cost individuals, the proposal may undermine premiums and plan choice for D.C.’s residents and small businesses.

Other potential solutions would offer help to residents of bare counties without the potential harm of the Senate proposals. For example, Congress could allow individuals living in bare counties to use ACA subsidies to buy into other comprehensive coverage — for example, the Federal Employees Health Benefits Program or Medicaid — to ensure access to ACA financial help without undermining market stability.

Policymakers also might consider requiring a fallback plan modeled on the approach taken in the Medicare prescription drug benefit. When that program was enacted, policymakers ensured adequate plan participation in the new market by designating a fallback plan that would provide coverage in any county with two or fewer plans. Such an approach would solve not only the bare counties problem but also would foster competition and ensure adequate plan participation.

Looking Forward

Policymakers looking to stabilize the market and avoid bare counties are right to start by ensuring that payments for cost-sharing reductions continue. Insurers have made clear that guaranteeing federal funding for cost-sharing reductions is a defining factor in their decision to participate in marketplaces next year. In the event there are counties without insurers, it is important that policymakers consider not just the immediate effects of potential policy fixes, but also their longer-term consequences for access to affordable, comprehensive coverage. Solutions for bare counties that allow individuals to use upfront assistance to buy a fallback plan that offers comprehensive coverage would help those individuals who are affected buy and maintain comprehensive coverage while insuring healthy and competitive markets for all.

Down to the Wire: Indecision on ACA Cost-Sharing Reduction Payments Creates Confusion for States

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http://www.commonwealthfund.org/publications/blog/2017/sep/cost-sharing-reduction-payment-indecision

Among the Trump administration’s first promises was to give states more flexibility and control over their health insurance markets than they had had during the Obama years. To date, however, the administration has offered states only uncertainty about what to expect in 2018, which has made it difficult to set premium rates. In particular, state officials are struggling to keep their insurance markets afloat in the face of the Trump administration’s continued indecision over whether to reimburse insurance companies for Affordable Care Act (ACA) cost-sharing reduction (CSR) plans. And time is running out.

No Clarity About Future Payments

Under the ACA, insurers are required to offer plans with reduced cost-sharing for out-of-pocket expenses like copayments and deductibles to eligible low-income enrollees; the government then reimburses insurers for the higher cost of those plans. The Trump administration has threatened to cut off those reimbursements, which for 2018 were projected to reach $8 billion. If these reimbursements do terminate at the end of this year, the Congressional Budget Office has estimated that 2018 premiums will rise by an average of 20 percent. This projection is consistent with similar estimates from the Kaiser Family Foundation and insurers’ own proposed 2018 rates, which were submitted to states this summer.

While the administration has continued to make the monthly CSR reimbursements so far, federal officials have not committed to any future payments. The Trump administration has extended the deadline for finalizing premium rates to September 20, 2017, but even that deadline is fast approaching. Once rates are finalized by states, insurers are locked into them for the full calendar year.

State Decisions Will Drive Insurer Participation and Costs for Consumers and Taxpayers

Whether insurers continue to participate in the ACA marketplaces and what consumers — and federal taxpayers — ultimately pay could depend on the actions of 50 different state insurance commissioners (plus D.C.). Yet, as noted, these state regulators and insurers are in a race against the clock to develop, review, and implement 2018 premium rates that reflect insurers’ likely costs as accurately as possible.

To date, state departments of insurance have given insurers different directives about how to set their premium rates for next year. The variation in these directives will result in different — and potentially significant — consequences for consumers, insurers, and federal taxpayers.

At least one state insurance department, Maryland’s, is currently requiring insurers to submit 2018 premium rates assuming they will be reimbursed for CSR plans throughout 2018. This approach has the advantage of helping to keep rate increases in check for consumers, particularly those not eligible for the tax credit subsidies that shelter low- and moderate-income enrollees from premium hikes. But this directive also carries big risks. If the Trump administration cuts the CSR reimbursements and insurers don’t have sufficient time to submit new rates, then they will face significant financial losses and some (if not all) will likely exit the market, leaving consumers without coverage options.

Other states, such as in New York and Utah, have required or allowed insurers to assume they won’t be reimbursed for CSR plans in 2018. While this means big premium increases for many consumers, it gives insurers more confidence to participate in the market by protecting them from major financial losses. At the same time, if the Trump administration decides to keep the CSR reimbursements going (or if Congress steps in to appropriate the necessary funds), these insurers will reap a windfall, financed largely by federal taxpayers through the ACA’s premium tax credits. Yet more state insurance departments, such as in Arkansas, California, Michigan, and New Mexico, have tried to hedge their bets by asking insurers to submit two sets of rate requests — one assuming CSR reimbursements will be paid, one assuming they won’t.

Still other states have not yet provided directives or reassurances to their insurers, essentially leaving it up to each company to decide how to respond to the uncertainty over CSRs. However, allowing each insurer to decide for themselves could lead to significant market disruption. For example, if one insurer sets premiums assuming they will be paid CSRs, but others in the market increase premiums assuming they will not, it will drive enrollment to the lower-cost plan at the expense of its competitors, placing that insurer at risk of insolvency if the CSRs are not paid.

Looking Ahead

Most observers have hoped that federal policymakers would announce a decision on CSRs one way or another in time for insurers to adjust premium rates for 2018. But as the deadline for finalizing rates looms, it is less and less likely that states will have the clear federal signal they need to decide how to best regulate their insurance markets and review proposed premiums for the upcoming year. Without clarity from federal officials or commitment from Congress to continue funding for CSRs, state insurance departments and insurers will need to make some high stakes bets on the future of these markets by setting premiums that may be too high or too low. Ultimately, the risk of losing these bets will be borne primarily by consumers and federal taxpayers.

Following the ACA Repeal-and-Replace Effort, Where Does the U.S. Stand on Insurance Coverage?

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http://www.commonwealthfund.org/publications/issue-briefs/2017/sep/post-aca-repeal-and-replace-health-insurance-coverage

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Conclusion and Policy Implications

The findings of this study could inform both short- and long-term actions for policymakers seeking to improve the affordability of marketplace plans and reduce the number of uninsured people in the United States.

Short-Term

The most immediate concern for policymakers is ensuring that the 17 million to 18 million people with marketplace and individual market coverage are able to enroll this fall.

Congress could take the following three steps:

  1. The Trump administration has not made a long-term commitment to paying insurers for the cost-sharing reductions for low-income enrollees in the marketplaces, which insurers are required to offer under the ACA. Congress could resolve this by making a permanent appropriation for the payments. Without this commitment, insurers have already announced that they are increasing premiums to hedge against the risk of not receiving payments from the federal government. Since most enrollees receive tax credits, higher premiums also will increase the federal government’s costs.9
  2. While it appears that most counties will have at least one insurer offering plans in the marketplaces this year, Congress could consider a fallback health plan option to protect consumers if they do not have a plan to choose from, with subsidies available to help qualifying enrollees pay premiums.
  3. Reinsurance to help carriers cover unexpectedly high claims costs.10 During the three years in which it was functioning, the ACA’s transitional reinsurance program lowered premiums by as much as 14 percent.

The executive branch can also play an important role in two ways:

  1. Signaling to insurers participating in the marketplaces that it will enforce the individual mandate. Uncertainty over the administration’s commitment to the mandate, like the cost-sharing reductions, is leading to higher-than-expected premiums for next year.
  2. Affirming the commitment to ensuring that all eligible Americans are aware of their options and have the tools they need to enroll in the coverage that is right for them during the 2018 open enrollment period, which begins November 1. The survey findings indicate that large shares of uninsured Americans are unaware of the marketplaces and that enrollment assistance makes a difference in whether people sign up for insurance.

Long-Term

The following longer-term policy changes will likely lead to affordability improvement and reductions in the number of uninsured people.

  1. The 19 states that have not expanded Medicaid could decide to do so.
  2. Alleviate affordability issues for people with incomes above 250 percent of poverty by:
    1. Allowing people earning more than 400 percent of poverty to be eligible for tax credits. This would cover an estimated 1.2 million people at an annual total federal cost of $6 billion, according to a RAND analysis.11
    2. Increasing tax credits for people with incomes above 250 percent of poverty.
    3. Allowing premium contributions to be fully tax deductible for people buying insurance on their own; self-employed people have long been able to do this.
    4. Extending cost-sharing reductions for individuals with incomes above 250 percent of poverty, thus making care more affordable for insured individuals with moderate incomes.
  3. Consider immigration reform and expanding insurance options for undocumented immigrants.

In 2002, the Institute of Medicine concluded that insurance coverage is the most important determinant of access to health care.12 In the ongoing public debate over how to provide insurance to people, the conversation often drifts from this fundamental why of health insurance. At this pivotal moment, more than 30 million people now rely on the ACA’s reforms and expansions. Nearly 30 million more are uninsured — because of the reasons identified in this survey. It is critical that the health of these 60 million people, along with their ability to lead long and productive lives, be the central focus in our debate over how to improve the U.S. health insurance system, regardless of the approach ultimately chosen.

 

What Graham-Cassidy means for pre-existing conditions

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https://www.axios.com/what-graham-cassidy-really-means-for-pre-existing-conditions-2487720743.html

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Jimmy Kimmel’s takedown of Sen. Bill Cassidy, and Cassidy’s response, ripped open the question of whether the GOP’s latest health reform bill protects people with pre-existing conditions. Cassidy and co-sponsor Sen. Lindsey Graham insist it does — as did President Trump in a tweet last night — but experts say that’s not really the case.

The bottom line: The bill’s funding cuts could pressure states — even blue states — to waive protections for sick people, as a way to keep premium increases in check. Older, sicker people in every state could end up paying more as states try to make up for a funding shortfall.

What the bill does: The bill wouldn’t repeal the Affordable Care Act’s rules about pre-existing conditions. But they might end up only existing on paper, the Kaiser Family Foundation’s Larry Levitt said.

Graham-Cassidy doesn’t let states waive the part of the Affordable Care Act that says insurers have to cover sick people. But it does allow states to opt out of several other ACA rules that can cause people with pre-existing conditions to pay more for their health care. Those provisions include:

  • The ban on charging sick people higher premiums than healthy people.
  • The requirement that insurers cover “essential health benefits,” including prescription drugs. People who need expensive drugs might not have access to a plan that covers those drugs, requiring them to pay out of pocket.
    • Services that aren’t “essential” benefits aren’t subject to the ACA’s ban on annual and lifetime limits.
  • The bill also would also loosen rules about how much insurers can raise their premiums because of a customer’s age. (Older people are more likely to have pre-existing conditions.)

What supporters will argue: The bill requires states to say how their waivers would provide affordable and accessible coverage for people with pre-existing conditions. But there’s no definition of what that means, and there’s also no enforcement mechanism.

  • “The bottom line is these protections are much more at risk under this bill than they are now,” said Cori Uccello, a senior health fellow with the American Academy of Actuaries.

Another level: At least theoretically, because the bill gives states so much control, a more liberal state like California might choose to preserve more of the ACA’s regulations than, say, Alabama. But this bill would radically redistribute federal health care funding — generally away from blue and purple states and toward red states. Those cuts could back blue states into seeking more expansive waivers.

  • Caroline Pearson of Avalere told me: “if you have less money, you either cover fewer people, or you cover the same amount of people with less generous coverage. People with pre existing conditions are very reliant on having access to affordable insurance and need insurance that is comprehensive. So if a bill reduces the availability of comprehensive insurance, people with chronic conditions are going to be disproportionately harmed.”

 

Cassidy-Graham’s Waiver Authority Would Gut Protections for People with Pre-Existing Conditions

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https://www.cbpp.org/blog/cassidy-grahams-waiver-authority-would-gut-protections-for-people-with-pre-existing-conditions

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The revised Affordable Care Act (ACA) repeal plan from Senators Bill Cassidy and Lindsey Graham, which is also backed by Senators Dean Heller and Ron Johnson, would give states broad waiver authority to eliminate the ACA’s core protections for people with pre-existing health conditions. These waivers would come on top of the proposal’s elimination of the ACA’s marketplace subsidies and Medicaid expansion, its radical restructuring of the rest of the Medicaid program, and its large cuts to total federal funding for health insurance coverage.

Specifically, a little-noticed provision of the block grant funding states would receive under the plan would let them obtain waivers of ACA pre-existing conditions protections and benefit standards for any insurance plan subsidized by block grant funding. For example, a state that used a small portion of its block grant funding to provide even tiny subsidies to all individual market plans could then waive these protections for its entire individual market. Likewise, states that used block grant funding to offer or subsidize coverage for low-income people could offer plans with large gaps in benefits. States seeking waivers would have to explain how they “intend” to maintain access to coverage for people with pre-existing conditions, but they wouldn’t have to prove that their waivers would actually do so.

In particular, states could waive the ACA’s:

  • Prohibitions against insurance companies charging people higher premiums based on their health status. While insurers would still be required to offer coverage to people with pre-existing conditions, they could offer them plans with unaffordable premiums of thousands or tens of thousands of dollars per month. For consumers, an offer like that is no different than a coverage denial.
  • Requirements that plans cover “essential health benefits.” Before the ACA introduced the requirement that all plans cover a defined set of basic services, 75 percent of individual market plans excluded maternity coverage, 45 percent excluded substance use treatment, and 38 percent excluded mental health care, according to analysis by the Kaiser Family Foundation. Under the Cassidy-Graham proposal, states could let insurers restore these exclusions, leaving many people — especially those with pre-existing conditions — without access to the health services they need.

The waiver authority included in the Cassidy-Graham plan is similar to the so-called “MacArthur amendment” waivers that were included in the House-passed ACA repeal bill. Analyzing those waivers, the Congressional Budget Office concluded:

  • States accounting for one-sixth of the nation’s population would choose to let insurers charge higher premiums based on health status. In those states, “less healthy individuals (including those with preexisting or newly acquired medical conditions) would be unable to purchase comprehensive coverage with premiums close to those under current law and might not be able to purchase coverage at all [emphasis added].”
  • States accounting for half of the nation’s population would choose to let insurers exclude essential health benefits. In those states, “services or benefits likely to be excluded … include maternity care, mental health and substance abuse benefits, rehabilitative and habilitative services, and pediatric dental benefits.” People needing these services “would face increases in their out-of-pocket costs. Some people would have increases of thousands of dollars in a year.”

Announcing their revised plan, Senators Cassidy and Graham explained that they sought to revise their prior legislation to accomplish the goal of letting states waive the ACA’s core consumer protections. Apparently, they largely succeeded: if their bill were adopted, millions of people with pre-existing conditions would lose access to these protections, and, as a result, would lose access to needed coverage and care.

Last-Ditch Effort By Republicans To Replace ACA: What You Need To Know

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http://khn.org/news/last-ditch-gop-effort-to-replace-aca-5-things-you-need-to-know/

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Republican efforts in Congress to “repeal and replace” the federal Affordable Care Act are back from the dead. Again.

While the chances for this last-ditch measure appear iffy, many GOP senators are rallying around a proposal by Sens. Lindsey Graham (R-S.C.) and Bill Cassidy (R-La.), along with Sens. Dean Heller (R-Nev.) and Ron Johnson (R-Wis.)

They are racing the clock to round up the needed 50 votes — and there are 52 Senate Republicans.

An earlier attempt to replace the ACA this summer fell just one vote short when Sens. Susan Collins (R-Maine), Lisa Murkowski (R-Alaska) and John McCain (R-Ariz.) voted against it. The latest push is setting off a massive guessing game on Capitol Hill about where the GOP can pick up the needed vote.

After Sept. 30, the end of the current fiscal year, Republicans would need 60 votes ­— which means eight Democrats — to pass any such legislation because special budget rules allowing approval with a simple majority will expire.

Unlike previous GOP repeal-and-replace packages that passed the House and nearly passed the Senate, the Graham-Cassidy proposal would leave in place most of the ACA taxes that generated funding to expand coverage for millions of Americans. The plan would simply give those funds as lump sums to each state. States could do almost whatever they please with them. And the Congressional Budget Office has yet to weigh in on the potential impact of the bill, although earlier estimates of similar provisions suggest premiums would go up and coverage down.

“If you believe repealing and replacing Obamacare is a good idea, this is your best and only chance to make it happen, because everything else has failed,” said Graham in unveiling the bill last week.

Here are five things to know about the latest GOP bill: 

1. It would repeal most of the structure of the ACA.

The Graham-Cassidy proposal would eliminate the federal insurance exchange, healthcare.gov, along with the subsidies and tax credits that help people with low and moderate incomes — and small businesses — pay for health insurance and associated health costs. It would eliminate penalties for individuals who fail to obtain health insurance and employers who fail to provide it.

It would eliminate the tax on medical devices. 

2. It would eliminate many of the popular insurance protections, including those for people with preexisting conditions, in the health law.

Under the proposal, states could “waive” rules in the law requiring insurers to provide a list of specific “essential health benefits” and mandating that premiums be the same for people regardless of their health status. That would once again expose people with preexisting health conditions to unaffordable or unavailable coverage. Republicans have consistently said they wanted to maintain these protections, which polls have shown to be popular among voters.

3. It would fundamentally restructure the Medicaid program.

Medicaid, the joint-federal health program for low-income people, currently covers more than 70 million Americans. The Graham-Cassidy proposal would end the program’s expansion under the ACA and cap funding overall, and it would redistribute the funds that had provided coverage for millions of new Medicaid enrollees. It seeks to equalize payments among states. States that did not expand Medicaid and were getting fewer federal dollars for the program would receive more money and states that did expand would see large cuts, according to the bill’s own sponsors. For example, Oklahoma would see an 88 percent increase from 2020 to 2026, while Massachusetts would see a 10 percent cut.

The proposal would also bar Planned Parenthood from getting any Medicaid funding for family planning and other reproductive health services for one year, the maximum allowed under budget rules governing this bill. 

4. It’s getting mixed reviews from the states.

Sponsors of the proposal hoped for significant support from the nation’s governors as a way to help push the bill through. But, so far, the governors who are publicly supporting the measure, including Scott Walker (R-Wis.) and Doug Ducey (R-Ariz.), are being offset by opponents including Chris Sununu (R-N.H.), John Kasich (R-Ohio) and Bill Walker (I-Alaska).

On Tuesday 10 governors — five Democrats, four Republicans and Walker — sent a letterto Senate leaders urging them to pursue a more bipartisan approach. “Only open, bipartisan approaches can achieve true, lasting reforms,” said the letter.

Bill sponsor Cassidy was even taken to task publicly by his own state’s health secretary. Dr. Rebekah Gee, who was appointed by Louisiana’s Democratic governor, wrote that the bill “uniquely and disproportionately hurts Louisiana due to our recent [Medicaid] expansion and high burden of extreme poverty.”

5. The measure would come to the Senate floor with the most truncated process imaginable.

The Senate is working on its Republican-only plans under a process called “budget reconciliation,” which limits floor debate to 20 hours and prohibits a filibuster. In fact, all the time for floor debate was used up in July, when Republicans failed to advance any of several proposed overhaul plans. Senate Majority Leader Mitch McConnell (R-Ky.) could bring the bill back up anytime, but senators would immediately proceed to votes. Specifically, the next order of business would be a process called “vote-a-rama,” where votes on the bill and amendments can continue, in theory, as long as senators can stay awake to call for them.

Several senators, most notably John McCain, who cast the deciding vote to stop the process in July, have called for “regular order,” in which the bill would first be considered in the relevant committee before coming to the floor. The Senate Finance Committee, which Democrats used to write most of the ACA, has scheduled a hearing for next week. But there is not enough time for full committee consideration and a vote before the end of next week.

Meanwhile, the Congressional Budget Office said in a statement Tuesday that it could come up with an analysis by next week that would determine whether the proposal meets the requirements to be considered under the reconciliation process. But it said that more complicated questions like how many people would lose insurance under the proposal or what would happen to insurance premiums could not be answered “for at least several weeks.”

That has outraged Democrats, who are united in opposition to the measure.

“I don’t know how any senator could go home to their constituents and explain why they voted for a major bill with major consequences to so many of their people without having specific answers about how it would impact their state,” said Senate Minority Leader Chuck Schumer (D-N.Y.) on the Senate floor Tuesday.