No legislation to provide such funding has yet advanced.

May 31—Policy watchers from across the political spectrum agreed that several steps are needed to quickly stabilize the government-run health insurance marketplaces for 2018.

Congress needs to “immediately” advance legislation to ensure payment of out-of-pocket subsidies that were promised but not funded by the Affordable Care Act (ACA), said Brian Webb, assistant director for Health Policy and Legislation for the National Association of Insurance Commissioners.

So-called cost-sharing reduction (CSR) payments were authorized for ACA marketplace enrollees with incomes of up to 250 percent of the federal poverty level, but the House of Representatives successfully challenged the payments as illegal unless appropriated by Congress. The Trump administration and House Republicans recently asked an appeals court for a 90-day hold on the lawsuit, which some interpreted as a sign that legislation is coming to address the issue, according to news reports.

“Do it right now—pass it,” Webb said of the CSR funding.

Sabrina Corlette, JD, a professor at the Center on Health Insurance Reforms at Georgetown University and an ACA advocate, agreed that the CSR funding is needed “tomorrow.”

Nearly 200 House Democrats recently demanded that President Trump fund the CSR payments, and some Republicans have voiced support for such legislation. But no legislation to provide the funding has advanced.

The lack of such funding could lead some insurers to drop out and others to sharply increase the premiums of their ACA plans, some industry advisers have warned.

For instance, in requesting a 23 percent increase for 2018, Blue Cross and Blue Shield of North Carolina noted that it did not expect the federal government to end up providing the CSR payments. Only an 8.8 percent increase would be needed, the insurer said, if Congress and the Trump administration guaranteed CSR payments for all of 2018.

America’s Health Insurance Plans (AHIP), the largest health insurer trade group, agreed that the CSR payments are key—at least through 2019. A recent AHIP letter to the senior Senate Republican on health policy, Sen. Orrin Hatch (R-Utah), estimated that the loss of CSRs would drive a premium increase of 15 to 20 percent for ACA marketplace plans and create a need for higher federal premium subsidies.

“Even more important, without CSR funding certainty, it will lead to fewer, if any, plan choices for millions of consumers,” wrote Marilyn Tavenner, president and CEO of AHIP.

Tavenner noted that the deadline for plans sold through the federally operated ACA marketplace to submit their initial rate plans to the Centers for Medicare & Medicaid Services is June 21. However, filing deadlines have passed in several states and are looming in 11 other states.

Reinsurance Help

Congress also needs to quickly enact legislation to create a reinsurance program for the ACA marketplaces, Webb and Corlette said during a policy discussion at the Bipartisan Policy Center.

“I haven’t heard anybody say there is anything better than a good reinsurance program,” said Joel Ario, a managing director of Manatt Health Solutions who oversaw the marketplaces for the Obama administration.

Ario praised the stability fund provision of the American Health Care Act (AHCA), a partial ACA repeal bill that passed the House on May 4 and is under consideration in the Senate. The bill’s stability fund would provide $15 billion in both 2018 and 2019 for states to stabilize their insurance markets and then provide $10 billion annually from 2020 through 2026.

“If they just pass the stability fund over there and leave the rest of it out, we’d be in pretty good shape,” Ario said.

A $15 billion annual reinsurance fund could reduce marketplace plan premiums by 15 percent or more and simultaneously lower federal spending on premium assistance, according to AHIP.

J. Bradley Wilson, president and CEO of Blue Cross and Blue Shield of North Carolina, urged Congress to enact the reinsurance program as part of a bipartisan package so that insurers would know it will exist at least through 2019.

Individual Mandate

Among the immediate policy actions advocated by Mila Kofman, executive director of Washington, D.C.’s ACA marketplace, and others was better enforcement of the ACA’s individual mandate.

“The individual mandate is a perfectly horrible solution except for all of the alternatives,” Corlette said.

The nonpartisan Congressional Budget Office (CBO) somewhat agreed. CBO noted in its latest evaluation of the AHCA that the ACA marketplaces should function “in most areas” if the subsidies and the mandate continue.

“The subsidies to purchase coverage, combined with the effects of the individual mandate, which requires most individuals to obtain insurance or pay a penalty, are anticipated to cause sufficient demand for insurance by enough people, including people with low health care expenditures, for the market to be stable in most areas,” CBO officials wrote.

The CBO cited the repeal of the individual mandate—not the loss of subsidies—as a leading reason why millions fewer would be covered under the AHCA.

But the mandate doesn’t work unless the penalties are high enough and are enforced, said Alice Rivlin, co-chair of the Debt Reduction Task Force at the Bipartisan Policy Center.

AHIP stopped short of urging continuation of the mandate and instead noted that if the mandate is eliminated, alternatives will be needed to incentivize continuous coverage.

Although the AHCA would end the mandate, Republicans have suggested alternatives such as imposing a premium penalty on those who let their coverage lapse or auto-enrolling people into low-cost high-deductible health plans.

The use of auto-enrollment would be very challenging logistically due to the churn that occurs in the individual marketplace, Corlette said.

Alternatively, Congress could increase enrollment of so-called young invincibles by increasing the premium subsidies that are available to people for whom that cost may be a barrier to coverage, Kofman said.

“If I can only afford $100 and my premium reduction is not sufficient, then I’m going to sit out if I am healthy,” Kofman said.

One industry adviser emphasized the overarching need for predictability.

“Whatever you are going to do with CSRs, whatever you are going to do with the mandate, do it right now and then stay with it,” Ario said. “At the end of the day, just tell us where it is and promise us you’re not going to keep fine-tuning it for the next two years.”

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

Publication Date: Wednesday, May 31, 2017