By Harris Meyer - Modern Healthcare
(Updated on Oct. 18)
In hopeful news for health plans, two key senators announced
the outline of a bipartisan agreement Tuesday to stabilize the individual
insurance market by extending cost-sharing subsidy payments to insurers for two
years.
Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), the
leaders of the Senate Health, Education, Labor and Pensions Committee, paired
that Democratic demand with a Republican-sough plan allowing states to ease
Affordable Care Act rules for the individual insurance market.
Healthcare
industry groups generally welcomed the agreement, which could avert an
unraveling of the individual market, much higher premiums and the exit of many
insurers from the ACA exchanges.
But President Donald Trump has given
mixed signals about his stance on the proposal, calling it a "short-term
solution" in the Rose Garden, and the long-term answer would be giving states
block grants to finance healthcare access, along the lines of the Graham-Cassidy
Senate bill to repeal and replace the ACA that
failed last month.
He pulled back that support hours later during a
Tuesday evening speech at the Heritage Foundation. While Trump praised
Alexander's and Murray's work, he said, "I continue to believe Congress must
find a solution to the Obamacare mess instead of providing bailouts to insurance
companies."
A White House official said the statement meant to convey his
opposition to the agreement.
Last week, Trump increased pressure on
Congress to negotiate a deal by cutting off the cost-sharing reduction payments, calling
them illegal payments because the money had not been appropriated by
Congress.
Alexander said he hopes to release the market-stabilization
bill later this week, in collaboration with Murray.
But it was unclear
how open other congressional Republicans will be to any deal that they believe
props up the Affordable Care Act.
"The GOP should focus on repealing and
replacing Obamacare, not trying to save it," Rep. Mark Walker (R-N.C.), chairman
of the ultraconservative Republican Study Committee, tweeted Tuesday. "This
bailout is unacceptable."
According to Alexander and Murray, the painstakingly negotiated compromise bill would fund
cost-sharing reduction payments to insurers for two years — including payments
for the last three months of 2017 — and give states more leeway on insurance
rules.
It would speed the approval of ACA Section 1332 waivers allowing
states to redesign their coverage systems, and relax the ACA's affordability
rules for qualifying plans. Any alternative model to the ACA coverage system
would have to "comparable affordability" for consumers.
The proposal also
would make high-deductible, "copper" plans available to people of all ages
rather than just to people up to age 30, as the ACA permits.
But, in a
relief to provider and patient advocacy groups, the agreement would not change
the ACA's requirement that all individual market and small-group plans cover 10
categories of minimum essential benefits. Nor would it allow insurers to base
premiums on customer's health status.
Without the cost-sharing reduction
payments, projected to total $7 billion this year and $10 billion next year,
insurers will face big financial losses for the last three months of 2017 and
will have to raise premiums sharply in 2018.
Insurers want the
cost-sharing reduction payments restored, though they are concerned about
provisions to let states relax ACA insurance market rules.
They and other
healthcare industry groups were encouraged by the bipartisan initiative and hope
Congress will move quickly to enact the package, though it may come too late to
moderate 2018 premium hikes. In most states, those rates already
have been set assuming the CSR payments would not be made.
"The most
important thing is to have the CSRs funded," said Ken Janda, CEO of Community
Health Choice, a safety-net plan in Houston, whose plan will lose at least $7
million this month in federal CSR payments.
Janda added that the bill
would need some floor requirements for state flexibility on ACA requirements. "I wouldn't leave it
wide open to the states," he said.
The Alexander-Murray agreement would
restore $106 million in funding for enrollment outreach, which the Trump
administration previously had slashed. ACA supporters have warned that
enrollment of younger, healthier people will drop, driving up premiums, unless
strong enrollment efforts are made during the upcoming open enrollment, which
starts Nov. 1.
It also would ease the way for states to obtain federal
funding for reinsurance programs that would reduce premiums, which insurers
strongly support and which Alaska and Minnesota already have done. Janda said
that's one of the most important actions states could take to lower
rates.
Alexander and Murray said they have the "basic outlines" of an
agreement but have differences to bridge, particularly over giving states
"meaningful" flexibility on coverage rules. Asked what the stumbling blocks to
the deal are, Alexander replied: "The definition of meaningful."
The
agreement is not expected to stop Republicans from continuing to press for
repeal and replacement of the Affordable Care Act.
The agreement "takes
care of the next two years," Alexander said. "After that, we can have a
full-fledged debate on where we go long-term on healthcare."
Senate
Minority Leader Chuck Schumer and other Democrats expressed support for the
Alexander-Murray agreement, though Democrats have concerns about whether
Republicans may try to add provisions to further relax the ACA's consumer
protections.
There are widespread concerns that Senate Majority Leader
Mitch McConnell and other congressional GOP leaders are in no hurry to find a
legislative vehicle for passing the market stabilization agreement because they
are unenthusiastic about it. In addition, many Republicans want to focus on
passing tax cuts and fear getting bogged down in another healthcare
debate.
"It's never been clear that Alexander has anyone's consent to
speak for the entire Republican world in this idea of a cutting a deal," said
Rodney Whitlock, a Republican healthcare lobbyist and former Senate
staffer.
"This is not a priority for McConnell," said Tom Daschle, the
former Democratic Senate Majority Leader, who was generally pleased with the
bipartisan deal but worried about its prospects for passage.
The problem,
he said, is finding a legislative vehicle for the market stabilization package,
and there are no easy or obvious candidates that have political momentum. "The
best Alexander can hope for is that he can fold it into the omnibus (spending)
bill at the end of the year. Right now, that is 50-50 at best."