Less certain is whether provisions can be passed to improve affordability for those enrolled in individual insurance off the ACA marketplaces.

Aug. 24—Legislation to stabilize the Affordable Care Act (ACA) marketplaces has a good chance of quickly clearing Congress in September, according to several Democratic and Republican healthcare policy staff leaders.

Both Republican and Democratic members of Congress have urged appropriation of federal funding for out-of-pocket cost-sharing reduction (CSR) subsidies for enrollees in Silver plans in the government-run individual-insurance marketplaces, who qualify based on income. The payments are offered to 5.9 million ACA marketplace enrollees, or 57 percent of the 10.3 million in the marketplaces, according to a Kaiser Family Foundation analysis.

The funding—estimated to total $7 billion this year—was administratively provided by the Obama administration until a federal judge ruled that it needed to be appropriated by Congress. The Trump administration has provided the funding on a monthly basis while the case is under appeal, often announcing the decision at the last moment. President Donald Trump has repeatedly threatened to withhold the funding—derided by critics as an insurer bailout—as a way to undermine the ACA.

The uncertainty has led many insurers to price their ACA marketplace plan premiums based on the assumption that the CSR payment payments will stop—although some states have requested separate filings to account for the possible continuation or termination of CSR payments. Based on the filings, 2018 rates would increase by an average of 15.4 percent with the CSRs paid and the individual mandate enforced and by 29.5 percent without that administrative support, according to tracking by acasignups.org.

The efforts by members of Congress to stabilize the marketplaces—which already increased by 25 percent for 2017—have included a proposal by the bipartisan House Problem Solvers Caucus and a series of four September hearings planned by the Senate Health, Education, Labor and Pensions (HELP) Committee. A Sept. 6 hearing will feature testimony from five state insurance commissioners, and a Sept. 7 session will include testimony from five governors.

“You’ll see from that list of governors the kind of middle-of-the-road, workmanlike, productive approach that both [Sen. Lamar] Alexander [R-Tenn.] and [Sen. Patty] Murray [D-Wash.] have in mind here,” a senior Democratic Senate healthcare aide said about the leaders of HELP committee.

Congressional healthcare staff spoke with reporters this week under the condition that they not be quoted by name.

The governors invited to testify are Charlie Baker of Massachusetts, Steve Bullock of Montana, Bill Haslam of Tennessee, Gary Herbert of Utah, and John Hickenlooper of Colorado.

Several congressional staff who focus on healthcare policymaking expressed hope this week that the effort could quickly result in a marketplace stabilization legislative package—even after the recent contentious fight over repealing and replacing parts of the ACA.

Murray “is cautiously optimistic that we will be able to sort of turn the page and treat the [ACA] much as we have treated Medicare over the last decade, as a program that is here to stay that we can make bipartisan tweaks to and work together on,” the Senate aide said. “Obviously, anything can happen and a lot will depend on the temperature of various caucuses when they return in the first week of September, but we’re optimistic those hearings will be productive.”

Package Details

Although some parts of a market stabilization package—such as the provision of CSR payments—are expected to draw bipartisan agreement, “nothing is settled yet,” the Democratic Senate aide said.

“Members of both sides have agreed that CSR certainty is something that’s important,” the aide said.

Senate Democrats previously introduced bills to fund CSRs and to provide reinsurance for ACA plans.

A Republican Senate healthcare aide said CSR discussions will focus on the duration of those payments and what legislative “vehicle” should be used to pass them.

“There’s general support for funding CSRs,” the Republican aide said.

The goal is to create a marketplace stabilization package “that can attract broad, bipartisan support,” the Democratic aide said. The package has begun to come together through staff negotiations.

A “reasonable goal” is congressional passage of the package by mid-September, but passage could be pushed back to late in the month, the aide said. The writing and scoring of the legislation “can occur pretty quickly if people want them to or need them to,” a Democratic House aide said.

The congressional aides expected 2018 marketplace plan rates to drop if the CSR payments are provided within that time frame.

The Congressional Budget Office (CBO) issued a projection in August that a lack of CSR payments would increase federal spending on premium assistance for ACA marketplace enrollees in Silver-level plans by a net $194 billion over the next decade, with many enrollees would paying the same or less for premiums due to additional subsidies. A counterintuitive finding was that through the resulting lower premiums and more generous plans, an absence of CSR payments actually would increase individual-insurance enrollees by 4 million by 2023, according to CBO.

Source of Conflict

The extent to which states should have flexibility to tweak the coverage requirements of plans sold on or off their ACA marketplaces is a key area of disagreement in the package. Republicans have urged allowing states to scale back ACA-mandated coverage requirements so that less expensive plans can be sold, but Democrats warned that such action would lead to plans that lack coverage of needed services.

A key to the marketplace discussions, according to some insurance industry advisers, is that off-exchange enrollees would not benefit from the additional funding but may find more-affordable plans if coverage requirements are loosened.

Nearly 2 million Americans have lost or dropped insurance coverage in 2017, according to a July tracking poll by Gallup and Sharecare, and losses were concentrated among those facing the biggest affordability challenges: young adults and those in the individual-insurance market.

Individual-market premiums increased 105 percent since the ACA marketplaces launched at the end of 2013, according to a report from the Department of Health and Human Services.

The ACA authorized 1332 waivers that allow states to waive some ACA provisions, such as premium subsidies, coverage requirements for plans (known as essential health benefits), and caps on annual out-of-pocket spending, among others.

So-called statutory guardrails would bar waivers that:

  • Reduce the number of people with insurance coverage
  • Reduce the affordability of health coverage
  • Reduce the comprehensiveness of health coverage
  • Increase the federal deficit

The so-called skinny ACA repeal, rejected by the Senate in July, would have retained only the prohibition on increasing the federal deficit.

That approach may be a nonstarter for congressional Democrats.

“We think we can have productive discussions about both market stabilization and some of the state flexibility ideas without getting into policy ideas that really take a chunk out of coverage, for example,” the Democratic Senate aide said.

Waivers that have received more support from Democrats include one obtained by Alaska that allowed the state to recoup some of the savings the federal government would garner from a state stability fund for high-cost enrollees, which was credited with keeping the 2017 rate increase to 7 percent instead of 40 percent.

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

Publication Date: Thursday, August 24, 2017