In the first of series of hearings aimed at building consensus on a plan to stabilize the Affordable Care Act (ACA)’s insurance marketplace, state insurance commissioners asked for lawmakers to pass a multi-year extension of the ACA’s payments to insurers.
The cost-sharing reduction subsidies, or CSRs, are paid to insurers in exchange for lowering out-of-pocket costs for lower-income enrollees on the ACA exchanges. An Obama-era lawsuit brought by House Republicans has left the payments in limbo, with the Trump administration not guaranteeing their payment long-term, leading to insurers pricing in the uncertainty in their requested rate hikes for 2018.
Tennessee insurance commissioner Julie Mix McPeak said exchange insurers in her state pinned about 14 percent of their average requested rate increase on the possibility CSRs wouldn’t be funded. If Congress could agree with the next few weeks to fund the payments through the 2018 plan year, she said there could be an immediate drop in premiums.
“The CSR funding issue is the single most critical issue that you can address to help stabilize insurance markets for 2018 and potentially bring down costs,” McPeak said in her prepared testimony to the Senate Health, Education, Labor and Pensions (HELP) Committee. “And to be clear, this issue is not an ‘insurer bailout.’”
The hearing, which also featured insurance commissioners from Alaska, Oklahoma, Pennsylvania and Washington, was the first of four scheduled by the HELP Committee as it seeks to craft the biggest update to the ACA since it was signed into law in 2010. The top Republican and Democrat on the committee both emphasized the approach will require compromise, something which has been lacking in health insurance legislation since the ACA.
Senate HELP Committee Chairman Lamar Alexander, R-Tennessee, said the likely combination would be Republicans compromising on extending of CSRs in exchange for Democrats’ support for more flexibility for states under the ACA’s Section 1332 waiver provision.
“If we can do two things, that would be two more things that we have agreed on in a bipartisan way in the last seven years in health insurance,” Alexander told reporters. “And then let the leaders see if we can pass it, and hope the House does and that the president signs it.”
Both Alexander and the ranking Democrat on the committee, Sen. Patty Murray of Washington, emphasized quick action was needed. With insurers needing to finalize contracts with HHS to participate in the exchanges by Sept. 27, Alexander and Murray hope to reach a consensus on a bill by the end of next week.
“I hope with today’s conversation we can continue to turn the page away from Trumpcare and partisanship we’ve seen so much of, and instead, start working on healthcare policies to help patients and families afford the care they need—because that’s the goal we should all be focused on,” Murray said.
After having heard from insurance commissioners on Sept. 6 and from governors on Sept. 7, the next two HELP Committee hearings will focus on state flexibility and input from the healthcare industry. The Sept. 12 hearing will include testimony from former HHS Secretary Mike Leavitt and Kaiser Permanente President and CEO Bernard Tyson. Speakers at the final hearing on Sept. 14 will include Healthy Tennessee President Manny Sethi, MD, and Susan Turney, MD, MS, CEO of Marshfield Clinic Health System.