Healthcare Triage News: The Trump Administration Has Many Options to Undermine Obamacare
While the Senate and the House haven’t been very effective in passing a repeal of Obamacare, the ACA’s provisions are still at risk. There’s a lot that Donald Trump’s administration can do (or not do) to undermine Obamacare’s provisions and marketplaces.
https://www.thefiscaltimes.com/2017/08/10/Taxpayers-Will-Pay-Price-Uncertainty-Over-Obamacare-2018
The health insurance industry remains in the throes of a largely unnecessary crisis of confidence, according to an analysis released by the Kaiser Family Foundation on Thursday.
With the open enrollment period approaching for Obamacare insurance plans sold through state exchanges, Kaiser Foundation experts were able to analyze the proposals for 2018 submitted by insurance companies to 20 states and the District of Columbia — the only places where enough information is made public to allow an assessment of what health care costs would look like for an average policyholder under the insurers’ requested rate structures.
“Insurers attempting to price their plans and determine which states and counties they will service next year face a great deal of uncertainty,” the authors wrote. “They must soon sign contracts locking in their premiums for the entire year of 2018, yet Congress or the Administration could make significant changes in the coming months to the law – or its implementation – that could lead to significant losses if companies have not appropriately priced for these changes. Insurers vary in the assumptions they make regarding the individual mandate and cost-sharing subsidies and the degree to which they are factoring this uncertainty into their rate requests.”
What that means for consumers is a bit of a mixed bag. Almost all insurers are seeking rate increases, with some approaching a 50 percent jump. But the actual impact on consumers varies depending on where they buy their insurance and how much money they earn. One thing is for sure, though: The federal government, and therefore taxpayers, will be on the hook for larger subsidy payments.
Because the majority of Americans obtain health insurance through an employer-sponsored plan or from federal programs like Medicare and Medicaid, the impact of the premium increases of exchange-based policies will mean little to a large element of the population.
Of those who buy insurance on the exchanges, the overwhelming majority receive tax credits meant to keep their premium payments to a specific fraction of their annual income. The remaining 16 percent, depending on their income, receive either a smaller subsidy or no subsidy at all. It is these people who, if they live in some of the regions facing large premium increases, who will be hurt the most.
The Kaiser study gathered information from the largest city in each of the 20 states plus the District of Columbia. (Benchmark levels for tax credits are based on the second-cheapest Silver Level plan available in the largest city in a state.) They estimated the change in costs for a 40-year-old non-smoker earning $30,000 a year.
In only one state was the annual premium expected to fall in 2018: Rhode Island, which anticipates a 5 percent drop. Vermont’s premiums will remain static in 2018 if the data holds. The other 19 states can all expect increases, from a modest 3 percent in Michigan to a whopping 49 percent in Delaware.
The average increase in the data collected by Kaiser is 17 percent.
However, none of those costs would be passed on to the consumer making $30,000 a year. In fact, because of adjustments to the tax credit, he could expect to see monthly costs fall by 3 percent, to $201, next year, regardless of what premium levels do where he lives.
But somebody has to pay when premiums go up, and if it isn’t the consumer, it’s the Treasury and by extension, the taxpayer.
The change in premium payments required to keep that 40-year-old’s health insurance premium at $201 per month will increase very sharply in many states, depending greatly on how far from the premium cap a silver plan was in 2017.
In Washington State, according to Kaiser, the premium tax credit would increase 239 percent, from $31 per month to $105. In New Mexico, it would jump 183 percent, from $51 to $144. In Rhode Island it would fall 13 percent, while in Vermont it would rise a modest 2 percent. On average, though, the amount of premium payment picked up by the federal government will increase by about 63 percent in the states reviewed by Kaiser.
Perversely, as Kaiser points out, that fiscal wound is largely self-inflicted. While it is impossible to gauge just how much of this year’s rate increases are attributable to insurers being nervous about whether the federal government would slash support payments in the middle of the 2018 policy year, the answer is surely non-trivial, and the dollars are coming out of the pockets of taxpayers.
https://www.axios.com/the-aca-stability-crisis-in-perspective-2470990374.html
The big questions about the stability of the Affordable Care Act marketplaces have focused on how fast premiums will rise, and how many plans will participate. But an equally important question, and the heart of the matter politically, is: How many people will be affected by the sharp premium increases?
The bottom line: The answer is about 6.7 million Americans who buy coverage in the non-group market in and out of the exchanges, and do not receive premium subsidies. That is a significant number of people, and an urgent policy problem requiring congressional attention and action by the administration, but it’s not a system-wide health insurance crisis. The non-group market has always been the most troubled part of the insurance system, and it was far worse before the ACA.
The breakdown:
Yes, 17.5 million is a sizeable number, and what happens to their health insurance coverage and costs is important. But, to put it in perspective:
According to our new analysis of proposed 2018 premium changes in the exchanges, double-digit increases for benchmark silver plans are quite common, though the range across major cities is large, from a 5% decrease in Providence, R.I. to a 49% increase in Wilmington, Del.
A big reason for these increases is the uncertainty in the market surrounding Trump administration policies, especially whether they will let the $7 billion in cost-sharing reduction (CSR) subsidies flow and whether the individual mandate will be enforced.
Who’s getting hit: 84% of the enrollees in the marketplaces – about 8.7 million people – receive premium subsidies under the ACA and are insulated from these premium hikes.
However, roughly 6.7 million people — the ones who buy ACA-compliant plans inside or outside the marketplace and aren’t subsidized — will feel the full brunt of premium increases. They’ll be hit if the uncertainty is not resolved and the rates do not come down before they are finalized.
In many cases, there is as much as a 20 percentage point swing or more in rates depending on whether the CSRs are paid.
The big picture: Dealing with this uncertainty is an urgent situation, particularly since it may result in some counties having no insurers at all, as well as coverage that is unaffordable for millions of Americans. But it is far from a crisis affecting most Americans and their health insurance.
The media needs to take great care to put this problem in perspective — otherwise they could unduly alarm the public and drive people to support the wrong policy solutions. Already, most Americans wrongly believe that premium increases in the relatively small non-group market affect them. So the headline should be: “Premiums Spike for SOME Americans.”
The danger in Congress is that discussion will spread too far beyond the immediate need to stabilize the non-group market, opening up all the old wounds surrounding the ACA and producing stalemate.
An Early Look at 2018 Premium Changes and Insurer Participation on ACA Exchanges
Each year insurers submit filings to state regulators detailing their plans to participate on the Affordable Care Act marketplaces (also called exchanges). These filings include information on the premiums insurers plan to charge in the coming year and which areas they plan to serve. Each state or the federal government reviews premiums to ensure they are accurate and justifiable before the rate goes into effect, though regulators have varying types of authority and states make varying amounts of information public.
In this analysis, we look at preliminary premiums and insurer participation in the 20 states and the District of Columbia where publicly available rate filings include enough detail to be able to show the premium for a specific enrollee. As in previous years, we focus on the second-lowest cost silver plan in the major city in each state. This plan serves as the benchmark for premium tax credits. Enrollees must also enroll in a silver plan to obtain reduced cost sharing tied to their incomes. About 71% of marketplace enrollees are in silver plans this year.
States are still reviewing premiums and participation, so the data in this report are preliminary and could very well change. Rates and participation are not locked in until late summer or early fall (insurers must sign an annual contract by September 27 in states using Healthcare.gov).
Insurers in this market face new uncertainty in the current political environment and in some cases have factored this into their premium increases for the coming year. Specifically, insurers have been unsure whether the individual mandate (which brings down premiums by compelling healthy people to buy coverage) will be repealed by Congress or to what degree it will be enforced by the Trump Administration. Additionally, insurers in this market do not know whether the Trump Administration will continue to make payments to compensate insurers for cost-sharing reductions (CSRs), which are the subject of a lawsuit, or whether Congress will appropriate these funds. (More on these subsidies can be found here).
The vast majority of insurers included in this analysis cite uncertainty surrounding the individual mandate and/or cost sharing subsidies as a factor in their 2018 rates filings. Some insurers explicitly factor this uncertainty into their initial premium requests, while other companies say if they do not receive more clarity or if cost-sharing payments stop, they plan to either refile with higher premiums or withdraw from the market. We include a table in this analysis highlighting examples of companies that have factored this uncertainty into their initial premium increases and specified the amount by which the uncertainty is increasing rates.
A number of insurers have requested double-digit premium increases for 2018. Based on initial filings, the change in benchmark silver premiums will likely range from -5% to 49% across these 21 major cities. These rates are still being reviewed by regulators and may change.
In the past, requested premiums have been similar, if not equal to, the rates insurers ultimately charge. This year, because of the uncertainty insurers face over whether the individual mandate will be enforced or cost-sharing subsidy payments will be made, some companies have included an additional rate increase in their initial rate requests, while other companies have said they may revise their premiums late in the process. It is therefore quite possible that the requested rates in this analysis will change between now and open enrollment.
Insurers attempting to price their plans and determine which states and counties they will service next year face a great deal of uncertainty. They must soon sign contracts locking in their premiums for the entire year of 2018, yet Congress or the Administration could make significant changes in the coming months to the law – or its implementation – that could lead to significant losses if companies have not appropriately priced for these changes. Insurers vary in the assumptions they make regarding the individual mandate and cost-sharing subsidies and the degree to which they are factoring this uncertainty into their rate requests.
Because most enrollees on the exchange receive subsidies, they will generally be protected from premium increases. Ultimately, most of the burden of higher premiums on exchanges falls on taxpayers. Middle and upper-middle income people purchasing their own coverage off-exchange, however, are not protected by subsidies and will pay the full premium increase, switch to a lower level plan, or drop their coverage. Although the individual market on average has been stabilizing, the concern remains that another year of steep premium increases could cause healthy people (particularly those buying off-exchange) to drop their coverage, potentially leading to further rate hikes or insurer exits.
Republicans have left Washington for the August recess with healthcare decisions hanging overhead, many of which must be addressed by the end of September.
Here are five decisions looming for the GOP.
While the GOP attempt at repealing ObamaCare has stalled for now, some in the party are not giving up.
“This ain’t over by a long shot … we won’t rest until we end the ObamaCare nightmare once and for all,” Vice President Pence said at the Tennessee GOP 2017 Statesmen’s Dinner Thursday, according to a pool report.
Yet Republicans are running out of time to take action, as the legislative vehicle they were using to gut the health law and avoid a Democratic filibuster expires at the end of September.
Sens. Lindsey Graham (R-S.C.) and Bill Cassidy (R-La.) are pushing a new plan to redirect money currently spent on providing coverage through ObamaCare and instead give it to states to spend as they choose.
They have been meeting with White House officials, who are also pushing Congress not to give up on repeal.
“I hope that our leadership will pay attention to this effort because the idea of leaving ObamaCare without a replacement is pretty naive,” Graham said this week.
Still, Senate GOP leadership has largely signaled they are moving on from repeal for now, with the legislative session in September likely to be dominated by work on funding the government and raising the debt ceiling.
And there are so far no signs that any of the three GOP “no” votes who sunk repeal, Sens. Lisa Murkowski (Alaska), Susan Collins (Maine), or John McCain (Ariz.), are changing their minds.
However, Graham said he is working with conservative Sens. Mike Lee (R-Utah) and Ted Cruz (R-Texas) to try to incorporate their ideas on repealing ObamaCare regulations into the plan.
And Majority Leader Mitch McConnell (R-Ky.) left the door open to bringing repeal back in some form, noting the fast-track procedure being used to avoid a filibuster had not expired.
“There’s still an opportunity to do that,” he said.
Lawmakers are ramping up bipartisan talks on the next steps for healthcare legislation, some more enthusiastically than others.
Sen. Mike Rounds (R-S.D.) said that following the failure of the Senate GOP’s ObamaCare repeal vote, Democrats have been more willing to talk with Republicans about ways to fix the law.
“Both sides are moving a little bit more to the middle,” Rounds said. “The discussions I’m having have been positive with Democrats, saying ‘look we are open to these changes, we will listen, we will work with you.’”
Sen. Roy Blunt (R-Mo.), a member of the GOP leadership, told The Hill he still wants to repeal ObamaCare “and start over, but that doesn’t mean an effort to hold up the collapsing structure in the short term isn’t the right thing to do.”
Both the Senate’s Health and Finance committees plan to hold bipartisan hearings in September when lawmakers return from recess.
Sen. Lamar Alexander (R-Tenn.) — the chairman of the Health, Education, Labor and Pensions Committee — said the goal is for the panel to craft a bipartisan, short-term proposal by mid-September, as insurers must sign contracts saying they’ll sell plans on the federal exchange by the end of that month.
Finance Committee Chairman Orrin Hatch (R-Utah) did not suggest the panel would produce legislation, but said there was bipartisan interest in a hearing.
“We’ve also heard a lot of demands from members of the committee for a healthcare hearing. I intend to do that as well shortly after the recess,” Hatch said Thursday.
But it’s not clear that the renewed interest in bipartisanship will yield legislation.
Alexander’s committee runs the ideological gamut from conservative Sen. Rand Paul (R-Ky) to progressive Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.).
Getting everyone behind a bill could prove a tall order, especially as some Republicans like Paul are committed to repealing ObamaCare, not repairing it.
Insurers are desperate to know whether they’re going to continue to receive critical ObamaCare payments from the federal government.
President Trump has threatened to halt the payments, which compensate insurers for subsidizing out-of-pockets costs for certain healthcare consumers.
But Congress could take the matter out of his hands by authorizing the payments the administration has been making on a monthly basis, which total about $7 billion for fiscal 2017.
Even if Trump doesn’t halt the cost-sharing reduction payments, a yearlong appropriation from Congress would give insurers certainty that they’ll continue to receive the funds.
Republicans are divided on what to do.
Many say the ObamaCare marketplaces need to be stabilized and are open to funding the payments. Alexander took the first concrete step forward to do so, saying that any stabilization package his committee produces should fund the payments.
But conservatives are vehemently opposed.
“I think it is a mistake to simply go forward with bailouts for big insurance companies,” Cruz said. “For whatever reason, the Democrats’ central priority seems to be providing billions of dollars in subsidies and bailouts to giant insurance companies.”
Time is of the essence for Congress to reauthorize the Children’s Health Insurance Program (CHIP). Funding is set to expire Sept. 30.
CHIP has historically had bipartisan support, and the Senate Finance Committee announced on Thursday it would hold a post-recess hearing on CHIP.
Congress last reauthorized the CHIP program in 2015 as part of a broader health package.
However, for Republicans still searching for a way to pass provisions of their failed ObamaCare repeal legislation, the authorizing legislation may be a tempting vehicle.
If CHIP funding expires, states will be forced to make difficult decisions about coverage. Millions of families would have to find other sources of insurance for their children at a time of uncertainty around the stability, availability and affordability of other types of coverage.
Insurance commissioners have a big fear: That the ObamaCare health marketplaces will open for business, but people in some areas won’t have any plans to choose from.
This scenario has never happened before, but as of Friday, 17 counties have zero insurers committed to their exchange, according to Kaiser Family Foundation.
The deadline to participate is looming. Insurers sign contracts with the federal government at the end of September, saying they’ll offer plans on the ObamaCare exchanges.
If the Senate Health Committee is able to meet its goal — hammering out a bipartisan short-term stabilization bill by mid-September — then that could help prevent more insurers from fleeing the marketplaces.
And behind the scenes, insurance commissioners have been offeringinsurers previously unheard of flexibilities to keep or entice them into the marketplaces.
Congress is aware of the situation, and has proposed several other solutions.
One bill from Tennessee’s Republican senators, Bob Corker and Alexander, would let people use their ObamaCare subsidies to purchase plans off the exchange — that is, if they live in a “bare county” without any ObamaCare plans to buy.
A counter bill from Sen. Claire McCaskill (D-Mo.) would allow those in bare counties to buy coverage on Washington, D.C.’s exchange, where Congress members and their staff purchase insurance.
Uncertainty over the Trump administration’s plans for cost-sharing reduction payments has payers on edge as they file their individual market rates for 2018. And in one state, regulators have asked insurers to file back-up plans.
The Florida Office of Insurance Regulation asked the nine payers that participate in the state exchanges to file rates in case the CSR payments don’t come through, the agency told FierceHealthcare. The average rate increase was already 17.8% for 2018, according to reported (PDF) from FOIR. With CSR payments out of the picture, rates are more than likely to jump.
Blue Cross Blue Shield of Florida, the state’s largest insurer, is projecting increases of about 20% if the Trump White House does not fund CSRs, according to its filings. Darnell Smith, the payer’s market president for North Florida, said in a July interview with the Jacksonville Daily Record that it would likely make insurance unaffordable for some of its members.
“If those go away, the coverage that we provide could become unaffordable for quite a few folks,” Smith said.
The fate of the CSR payments rests at least in part in President Donald Trump’s hands. Experts have named continued funding for those payments as key to stabilizing the individual insurance markets.
A court ruling earlier this week, though, may have made a notable dent in Trump’s power to use CSRs as a health reform bargaining chip. A U.S. appeals court ruled that states can intervene in Congress’ ongoing suit against the payments.
The uncertainty about CSRs is reflected in rate filings beyond Florida as well. Median premiums in New Hampshire could rise 43% based on state filings (PDF) and significant increases are also expected in states like Wyoming (PDF). Molina Healthcare, which posted significant losses in its second quarter, could hike its Affordable Care Act plan rates by as much as 55%.
America’s Health Insurance Plans spokeswoman Kristine Grow told FierceHealthcare that payers are in desperate need of certainty when planning for 2018 and beyond.
“As plans make decisions for 2018, they do so with a view of wanting to serve consumers in the market for the full year,” she said. “That’s why it’s so important to know what will happen with CSRs long term.”
If Congress abandons efforts to repeal and replace the Affordable Care Act (ACA), President Trump has said he would “let Obamacare fail.” This Q&A examines what could happen if the Affordable Care Act, also called “Obamacare,” remains the law and what it might mean to let Obamacare fail.
The Affordable Care Act was a major piece of legislation that affects virtually all payers in the U.S. health system, including Medicaid, Medicare, employer-sponsored insurance, and coverage people buy on their own. One of the biggest changes under the health reform law was the expansion of the Medicaid program, which now covers nearly 75 million people, about 14 million of whom are signed up under the expansion. Most Americans, including most Republicans, believe the Medicaid program is working well.
When people talk about the idea of the ACA failing, they are usually referring to the exchange markets, also called Marketplaces. These markets, which first opened in 2014, are part of the broader individual insurance market where just 5-7% of the U.S. population gets their insurance. People who get insurance from other sources like their work or Medicaid are not directly affected by what happens in the individual insurance market.
The exchange markets have not been without problems: There have been some notable exits by insurance companies and premium increases going into 2017, and in the early years of the exchanges, insurers were losing money. The structure of the ACA’s premium subsidies – which rise along with premiums and cap what consumers have to pay for a benchmark plans a percentage of their income – prevents the market from deteriorating into a “death spiral.” However, premiums could become unaffordable in some parts of the country for people with incomes in excess of 400% of the poverty level, who are ineligible for premium assistance.
Insurer participation in this market has received a great deal of attention, as about 1 in 3 counties – primarily rural areas – have only one insurer on exchange. Rural counties have historically had limited competition even before the ACA, but data now available because of the Affordable Care Act brings the urban/rural divide into sharper focus. On average at the state level, competition in the individual market has been relatively stable – neither improving nor worsening.
Premiums in the reformed individual market started out relatively low and remained low in the first few years – about 12% lower than the Congressional Budget Office had projected as of 2016 –before increasing more rapidly in 2017. Most (83%) of the 12 million people buying their own coverage on the exchange receive subsidies and therefore are not as affected by the premium increases, but many of the approximately 9 million people buying off-exchange may have difficulty affording coverage, despite having higher incomes. As might be expected, after taking into account financial assistance and protections for people with pre-existing conditions, some people ended up paying more and others paying less than they did before the ACA. Our early polling in this market found that people in this market were nearly evenly split between paying more and paying less. About 3 millionpeople who remain uninsured are not eligible for assistance or employer coverage and many of them may be going without coverage due to costs.
Our recent analysis of first quarter 2017 insurer financial results finds that the market is not showing signs of collapse. Rather, insurers are on track to be profitable and the market appears to be stabilizing in the country overall. In other words, those premium increases going into 2017 may have been enough to make the market stable without discouraging too many healthy people from signing up. However, there are still markets – particularly rural ones – that are fragile.
https://www.reuters.com/article/us-usa-healthcare-idUSKBN1AI28L
Democratic and Republican U.S. governors on Wednesday urged the Trump administration, as well as Congress, to continue funding payments to health insurance companies that make Obamacare plans affordable, calling it critical to stabilizing the insurance marketplace.
Republican President Donald Trump, frustrated that Obamacare survived attempts to repeal it, has threatened to cut off about $8 billion in subsidies that help control costs for low-income Americans under the Affordable Care Act, Democratic former President Barack Obama’s signature domestic initiative.
“The Administration has the opportunity to stabilize the health insurance market across our nation and ensure that our residents can continue to access affordable health care coverage,” said a statement by the Health and Human Services Committee of the National Governors Association.
“A first critical step … is to fully fund CSRs (cost-sharing reduction payments) for the remainder of calendar year 2017 through 2018,” the statement said, adding this was needed as Congress and the administration address long-term reform efforts.
The committee is led by Virginia Governor Terry McAuliffe, a Democrat, and Massachusetts Governor Charlie Baker, a Republican. Earlier this year, the governors sent a letter calling on Congress to fully fund the cost-sharing payments.
Some Congressional Republicans have joined Democrats in urging Trump to continue the payments. Republican Senator Lamar Alexander, chairman of the health committee, said Tuesday the president should pay the subsidies through September while lawmakers work on bipartisan legislation to fund the outlays for another year.
But the Senate’s No. 2 Republican John Cornyn hesitated when asked Wednesday if he would support such legislation.
“I’ve said before that I’m not in favor of throwing money at insurance companies without reform, so that’s going to be the nature of the conversation,” Cornyn told reporters outside his office.
Asked what reforms he’d like to see, Cornyn mentioned the “skinny” Obamacare repeal bill the Senate voted down last week. Among other things, it would have repealed the requirement that every American have health insurance or pay a penalty.
Insurers say that the cost-sharing payments are passed onto customers in the form of lower deductibles and co-pays that make care more affordable for low income Americans.
Insurers are finalizing 2018 premium rates for the individual Obamacare market, with many saying their decision hinges on government guarantees for cost-sharing subsidies.
Molina Healthcare Inc said on Wednesday it would stop selling Obamacare plans in Utah and Wisconsin, joining a slew of health insurers that have exited Obamacare markets amid uncertainty over the healthcare law.
Anthem Inc, one of the largest sellers of these plans in 2017, has pared back offerings or mostly exited five states including California and may exit more.
White House budget director Mick Mulvaney told CNN the administration was still considering whether to end cost-sharing subsidies.
A bipartisan Senate effort to continue federal payments to insurers and avert a costly rattling of health insurance markets faces a dicey future. The uncertainty shows that last week’s wreck of the Republican drive to repeal the Affordable Care Act hasn’t blunted the issue’s sharp-edged politics.
President Donald Trump is threatening to halt the payments in hopes of forcing Democrats to negotiate an end to the Obama-era law. The insurance industry and lawmakers from both parties say blocking the money would lead insurers to raise premiums for people buying individual policies and might induce companies to abandon some markets.
Into the fray has stepped Sen. Lamar Alexander, R-Tenn., chairman of the Senate Health, Education, Labor and Pensions Committee.
He said he will work with the committee’s top Democrat, Sen. Patty Murray of Washington state, on a bill next month that would pay insurers through 2018. In exchange, he wants Democrats to agree to make it easier for states to choose their own health coverage standards that insurers must provide, and not heed consumer-friendly requirements of former President Barack Obama’s law.
While that is an idea Democrats say they will discuss, it’s unclear whether the two parties can reach a deal.
For the GOP’s failed effort to repeal and replace Obama’s overhaul, Senate Republicans used special rules allowing passage by a simple majority. But this developing bill would need 60 votes to succeed. Republicans hold a 52-48 advantage in the Senate, which means Democratic backing will be crucial.
Democrats will be reluctant to strike an agreement that would pull back far on Obama’s protections, which include a set of services insurers must cover and guarantees that premiums for healthy and seriously ill people are equal.
“It’s going to be hard to get common ground,” said Sen. Chris Murphy, D-Conn., a committee member. “Republicans are going to want some initial flexibility” for coverage requirements, “and that’s not an easy thing to achieve.”
Republicans are divided, too.
Many, including Trump, have called the payments an insurers’ bailout. Conservatives are reluctant to continue payments to help sustain a law the GOP has pledged for years to toss out.
“I was a total repeal guy,” said Sen. Richard Shelby, R-Ala. “I don’t know if I want to prop it up.”
Added GOP Sen. Ted Cruz of Texas: “I think it’s a mistake to bail out insurance companies.”
Obama’s law requires insurers to reduce out-of-pocket costs such as deductibles and copayments for millions of low- and middle-income customers. It also requires the government to reimburse insurers for those costs.
But a federal court found that Congress hasn’t properly approved money to do that. Both Obama and Trump have continued making the payments as the case has dragged on.
Besides the outright opponents, some Republicans say they would be reluctant to support an Alexander bill unless whatever eased regulations Democrats agree to are worthwhile. It’s unclear what Alexander or other Republicans are willing to accept.
“We certainly should get some structural change to bring down premiums in exchange for that,” said Sen. Ron Johnson, R-Wis. “We can’t just throw money at the problem.”
That echoes what Senate Majority Leader Mitch McConnell, R-Ky., said last Friday after the Senate rejected the third health proposal he advanced, effectively sinking the repeal effort.
“Bailing out insurance companies with no thought of any kind of reform is not something I want to be part of,” McConnell said.
Alexander said Wednesday that he has kept McConnell apprised of his effort. Asked if he had received a commitment that McConnell would bring such legislation to the full Senate, Alexander said, “Well, he doesn’t know what bill we’re going to have.”
But Alexander does have allies.
“We’ll eventually repeal Obamacare and put something in its place,” said Sen. John Kennedy, R-La. “In the meantime, I think it’s very important not to see any Americans get hurt.”
If the GOP divisions persist, McConnell and House Speaker Paul Ryan, R-Wis., might have to decide whether to have votes on legislation opposed by substantial numbers of Republicans. That’s always an uncomfortable proposition for party leaders.
“That’s a question for McConnell,” said the second-ranking Democratic senator, Illinois’ Dick Durbin, said asked whether he thought the GOP leader would allow a vote on a bill opposed by many Republicans.
Durbin said if Republicans are truly concerned about keeping insurance markets stable, “they have to do something.”
Would Ryan support a measure like Alexander’s?
The speaker “believes repeal and replace is the best course of action and that the Senate needs to act,” spokeswoman AshLee Strong said.
Drew Altman is president and chief executive of the Henry J. Kaiser Family Foundation. Larry Levitt is senior vice president of the Kaiser Foundation.
Republicans failed to repeal and replace the Affordable Care Act early Friday because of divisions within their own ranks, and because they tried not only to repeal and replace the ACA but also to cut and cap the Medicaid program, generating opposition from many red-state governors and their senators.
But most of all, they failed because they built their various plans on the false claim — busted by the Congressional Budget Office — that they could maintain the same coverage levels as the ACA and lower premiums and deductibles, while at the same time slashing about a trillion dollars from Medicaid and ACA subsidies and softening the ACA’s consumer protection regulations. Had they succeeded, they would have won a big short-term victory with their base, which strongly supports repeal, but suffered the consequences in subsequent elections as the same voters lost coverage or were hit with higher premiums and deductibles.
The challenge now is to stabilize the ACA’s insurance marketplaces. They are not in free fall or imploding, as President Trump suggests, and in most markets insurer profits have been improving. But these are fragile markets, especially in rural areas, and there are 38 “bare counties” where no insurer currently intends to participate in 2018. About 20 percent of marketplace enrollees have access to only one insurer, with the biggest problems in rural areas.
Insurers have submitted their initial rates to state regulators for 2018, and in some areas, the increases are steep. These companies are hedging their bets in the face of uncertainty emanating from Washington, and who can blame them? Now, with ambiguity over legislative action to repeal and replace the law lifted, the remaining uncertainty is whether Congress and the administration will take steps to stabilize markets or instead undermine them.
The immediate question is whether the administration will implement the law as intended or, in a sense, enact “skinny repeal” through administrative action. To stabilize the marketplaces, the administration would need to enforce the individual mandate as intended, commit to providing payments to insurers that compensate for reducing cost-sharing for low-income enrollees, and continue to provide outreach funds to support enrollment and consumer education activities.
Insurers need to finalize their 2018 rates soon and sign contracts with the federal marketplace by the end of September, so clarity on the $7 billion in cost-sharing payments to insurers is key. If they’re not made, insurers will need to raise premiums by about 19 percent, or they might just decide to exit the market entirely. These payments are subject to a lawsuit filed the House, so Congress might need to step in and assure that the payments will continue.
It is unclear whether Republicans and Democrats can work together on narrow legislation to stabilize the marketplaces without once again opening up a broader debate about the ACA. Republican bills included significant federal funds to help insurers cover the cost of high-risk patients, an idea that was also part of the ACA for its first three years of implementation. These reinsurance or risk-sharing pools would bring premiums down, especially for middle-class consumers not eligible for tax credits in the marketplaces, a primary goal for both parties.
Conservatives may be resistant to such spending, so Congress might also consider ideas they advocated in the recent debate, such as allowing premiums to be paid from health savings accounts. This, too, would provide premium relief to middle-class people buying their own insurance.
Still, only 7 percent of the American people get their insurance through the individual market. Finding consensus on the narrow issue of stabilizing this slice of the health insurance system should be possible if the larger, partisan debate about Obamacare is truly over.
It is also possible as the smoke clears on the health-care battlefield that more states will want to move forward with Medicaid expansions, now that federal funding for those expansions appears secure. Red states will likely seek a conservative stamp on their expansions, adding elements such as work requirements, drug testing, premium payments, time limits or testing private insurance models. Some of these policies will be controversial, and others may stretch what’s allowed under federal law too far. But some wrinkles will no doubt be necessary if Medicaid is to be expanded to the millions of people in the 19 holdout states.
But one thing is clear: 59 percent of the public says President Trump and the Republicans are now in control of government and are responsible for making the ACA work, and 74 percent says they should “do what they can to make the law work.”
It’s apparent what needs to be done to stabilize the marketplaces and who owns the ACA going forward. It’s no longer Obamacare; it’s now just the nation’s health insurance system.
HENRY KOTULA 