Early in the summer, hearings on the Affordable Care Act (ACA) seemed unlikely to ever happen. But with fall swiftly approaching, the Senate’s Health, Education, Labor and Pensions Committee has decided it will hold four, the first of which took place on Wednesday.
During this week’s hearing, senators were joined by state insurance commissioners. Wonk-ish health experts guided senators on how best to strengthen the law’s marketplace. Commissioners from blue and red states where the ACA marketplace has succeeded and flailed all unilaterally recommended the government pay cost sharing subsidies to insurers. Oklahoma Insurance Commissioner John Doak specifically said the CSR payments are necessary, but only after being nudged by Senator Al Franken (D-MN); the commissioner is ultimately in favor of repealing the health law.
President Donald Trump has been making these payments monthly, putting insurance commissioners on edge. Cost sharing subsidies help low-income people pay for insurance, and if they are cut, the Congressional Budget Office has said premiums for benchmark plans could rise 20 percent over the next year and about 25 percent by 2020. State commissioners say the government should commit to these payments until 2019; Washington Insurance Commissioner Mike Kreidler has advocated for longer.
The committee has until September 27, when insurers have to sign final contracts for selling on 2018 ACA marketplaces, to reach a consensus. HELP Committee Chairman Lamar Alexander (R-TN) said the committee is aiming for the third week in September, an admittedly ambitious timeline.
“This hearing is about taking one small step,” Alexander said, offering a disclaimer at the start of the hearing.
To achieve this goal, HELP will hold three more hearings — the next one is Thursday — and before every hearing, the health committee will host an off-the-record coffee meeting and invite the full Senate. Alexander said before Wednesday’s hearing, 31 senators showed up, signaling a surprising bipartisan shift — a stark contrast to the earlier, more aggressive Obamacare repeal fight.
“We are more than ready to consider additional ideas,” said Ranking Member Senator Patty Murray (D-WA) in her opening statements.
What’s likely to come out of the hearings to come is a commitment to cost sharing subsidies payments and more state flexibility. If the committee is able to accomplish this goal, then the Senate can look to longer term solutions.
It’s important to remember that the individual market was stabilizing and insurers were regaining profitability, according to first quarter financial data from 2017 analyzed by the Kaiser Family Foundation. But by no means is the current health law perfect: 1,476 counties are projected to have one insurance carrier for 2018, — or 46.99 percent of the country. ACA insurance premiums are set to rise next year, largely due to uncertainty fueled by the Trump Administration, though the majority of ACA consumers will not see the effects of premiums spikes because many qualify for federal assistance.
Here’s what commissioners have suggested to further stabilize and strengthen the ACA marketplace, as determined in their first hearing this week.
Provide state flexibility
This suggestion was put forth by Sen. Alexander and his Republican colleagues, and later echoed by insurance commissioners. State flexibility will come in waiver form; these are known as 1332 waivers and were written into current health law to allow states to experiment with different health coverage models. States can request five-year waivers, although the waivers include guardrails that limit how they can be used.
As Kaiser Family Foundation explains, 1332 waivers need to:
- Provide coverage that is at least as comprehensive in covered benefits;
- Provide coverage that is at least as affordable (taking into account premiums and excessive cost sharing);
- Provide coverage to at least a comparable number of state residents; and
- Not increase the federal deficit.
To date, six states have submitted waiver applications, and only Hawaii has been approved. A major hindrance to the program that some insurance commissioners mentioned during the hearing is the federal approval process.
The six month waiting period before they receive federal approval is stifling states, according to Alaska Insurance Commissioner Lori K. Wing-Heier. Pennsylvania Insurance Commissioner Theresa Miller added that the current process is cumbersome. States need to pass legislation and hold hearings, she explained.
“The more we can streamline, the better off we would be,” she said. She suggested an approval letter from the governor should suffice as opposed to waiting for the state legislator to get back to session.
However, Kreidler warned that Congress should be mindful when allowing states more flexibility. By loosening these guardrails, states can inadvertently weaken consumer protections.
Others, namely the Tennessee insurance commissioner, believe states should be able redefine essential health benefits. Essential health benefits are a set of 10 categories of services health insurance plans must cover; these include doctors’ services, inpatient and outpatient hospital care, prescription drug coverage, pregnancy and childbirth, and mental health services.
Create a Reinsurance program
Reinsurance is a payment to plans that enroll higher-cost individuals which protects consumers against premium increases. Essentially, if a consumer’s costs exceed a certain threshold then the insurance plan is eligible for the payment.
Currently, Alaska and Minnesota have set up state reinsurance programs. Alaska has among the highest insurance premiums but Alaskans don’t feel it due to a state-based reinsurance program that was implemented in 2016. In 2018, the state will pay $11 million and the federal government will pay $48 million. The program is set to run until 2022.
Four of the five insurance commissioners testifying Wednesday called for a federal reinsurance program; Oklahoma insurance commissioner Doak did not. (Doak is term-limited and can’t run again in 2018 for insurance commissioner.)
Don’t sabotage ACA open enrollment
The Trump administration announced last week that it would slash the Department of Health and Human Services’ ACA advertising and promotion funding by 90 percent, from $100 million to $10 million. Additionally, the administration announced it would cut funding for navigator groups — nonprofits that help people enroll in health insurance — from $63 million to $36 million.
Doak was not convinced that the cuts would be detrimental and has called for thorough research to be done into their effectiveness. Alexander suggested during the hearing that the navigator program could use funding oversight, and sympathized with Doak’s assertion that money is not well-spent. Supporters of the law say that robust marketing is effective.
Research backs the idea that a robust campaign is, in fact, helpful. When Kentucky cut back on its robust marketing effort in 2016, the state saw 450,000 fewer page views per week on the ACA exchange website and 20,000 fewer unique visitors per week.