Members of Congress have expressed support for temporary stabilization steps for the ACA marketplaces, but specific proposals have drawn early opposition.

Feb. 2—To keep more insurers from dropping out of the government-run health insurance marketplaces and to prevent further rate spikes, federal policymakers need to implement rules changes by the end of March, according to an industry regulator and advocates.

The timing requirements stem from state policy-form filing deadlines—generally in May—for insurance plans to be sold next year in the marketplaces created by the Affordable Care Act (ACA), according to industry experts. Rate-filing deadlines are in July.

The deadlines for carriers fall “after they have already made their decision; the decisions are made much earlier than the actual deadline,” Janet Trautwein, CEO of the National Association of Health Underwriters, testified at a Feb. 1 hearing of the Senate Health, Education, Labor and Pensions (HELP) Committee.

Insurance companies require a range of actions—some administrative and some legislative—to stabilize the ACA marketplaces, according to policy advisers.

Congressional Republicans and Democrats said they were open to some changes to benefit the marketplaces, while other proposed tweaks drew early opposition. And the marketplace stabilization push—which could affect 18 million people with coverage in and outside of the ACA marketplaces—is further complicated because it comes amid ongoing Republican efforts to repeal and replace the ACA.

“It can be done temporarily; it can be done in effect to stabilize that market for two or three years while we discuss everything else,” Sen. Lamar Alexander (R-Tenn.), chairman of the HELP Committee, said  during the committee hearing. “And I think that it means that Republicans are going to have to approve some things we normally might not support, and Democrats will have to do some things they normally might not do during this transition.”

Changes Wanted

Amid sharp partisan disagreement over whether the marketplaces have become unsustainable, insurance analysts have highlighted concerning data. For instance, a recent analysis by consulting firm Avalere Health found 2017 ACA marketplace plans are more expensive and offer narrower provider networks. The study found fewer insurers participating in the marketplaces than in previous years, with increases in premiums—particularly among the popular, low-cost silver plans, in which prices rose by 12 percent to 25 percent. Silver-plan deductibles increased 20 percent to an average of $3,703. Avalere also found that coinsurance payments for specialty drugs rose by 31 percent or more in bronze and silver plans.

“First and foremost, immediate policy steps are needed to help deliver an effective transition and continuous coverage,” Marilyn Tavenner, president and CEO of America’s Health Insurance Plans, told the committee.

Immediate actions the Trump administration could take to stabilize the markets, according to the National Association of Insurance Commissioners, include changing the rules surrounding special enrollment periods (SEPs), reducing the ACA’s 90-day grace period before an insurer can cancel a policy for failure to pay premiums, allowing the marketplaces to include plans that don’t cover all essential health benefits (EHBs), allowing continuation of so-called grandfathered and grandmothered plans, and redefining the formula for the medical-loss ratio.

Tavenner agreed that administratively curtailing SEPs would “have immediate impact to keep people in the market and control premiums.”

“These are just a few issues that could be easily addressed by the new administration and would increase stability in health insurance markets,” Trautwein said.

Alexander said he would forward that list of proposals to the secretary of the U.S. Department of Health and Human Services for consideration.

Congressional action would be required for statutory changes sought by insurance advocates:

  • Allowing tax credits for paying premiums to be used outside the ACA marketplace
  • Allowing anyone to buy subsidized catastrophic plans available in the ACA marketplaces regardless of age or income
  • Decreasing the frequency of open enrollment, which takes place annually, and adding late-enrollment penalties such as those used in Medicare Part B

Allowing expansive use of tax credits would help to retain coverage among those who may qualify based on income but who get coverage outside the ACA marketplaces—about 7 million people, according to Alexander.

Among other hoped-for changes is expanding the ACA’s age-band rating from a three-to-one ratio to at least five-to-one.

“A ratio closer to five-to-one or six-to-one would provide more rate flexibility in the market and, coupled with EHB flexibility, may have the ultimate impact of growing the insurance pool in Tennessee by attracting younger and healthier populations,” Julie Mix McPeak, commissioner of the Tennessee Department of Commerce and Insurance, said at the hearing.

Tavenner warned that insurers continue to rely on the ACA reinsurance program and on subsidies covering out-of-pocket costs of enrollees earning up to 250 percent of the federal poverty level. Republicans have criticized the former program as an insurer bailout and successfully challenged the legality of the latter program in federal court.

Conflicts Loom

Even if legislators can move beyond fundamental disagreements over the long-term future of the ACA, many of the quick changes sought to stabilize the marketplaces are expected to draw sharp partisan battles.

For instance, Sen. Tammy Baldwin (D-Wis.) warned against limiting EHBs. As an example of the need for EHBs, she highlighted coverage of of substance-abuse treatment, which has proved helpful to many during the ongoing opioid-abuse epidemic.

“You can’t incarcerate yourself out of an opioid emergency; you’ve got to treat your way out of it,” former Kentucky Gov. Steve Beshear said during the hearing. “If you take that away—and we have an emergency now—you can basically write off half the country.”

Other ACA supporters have expressed more openness to changing EHBs.

“Maybe there’s more freedom we could give or more flexibility, but let’s have that discussion,” Elizabeth Fowler, PhD, a former healthcare policy adviser in the Obama administration, said at a recent Washington, D.C., briefing.

Another area where a battle could loom is in a renewed Democratic push to add a so-called public option to the ACA marketplaces. Sen. Sheldon Whitehouse (D-R.I.) said Wednesday that such an addition was needed to “protect these markets against manipulation by private insurers.” Commercial insurers and Republicans have strongly opposed the addition of public-option plans.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Thursday, February 02, 2017