Numbers good for health plan
CBO says latest bill would cut deficit, not insured rolls
WASHINGTON — A bipartisan Senate plan to try to stabilize Patient Protection and Affordable Care Act marketplaces would lower the federal deficit by nearly $3.8 billion over the next decade and would not affect the number of people with health insurance, Congress’ official budget scorekeepers said Wednesday.
The Congressional Budget Office assessment of the plan, written by the chairman and top Democrat on the Senate Health, Education, Labor and Pensions Committee, forecasts no fiscal effect from one of its main features: resuming for two years the payments President Donald Trump recently ended to Affordable Care Act insurers to reimburse them for discounts they must provide lower-income customers in insurance marketplaces created by the law.
That central aspect of the bill would not itself affect the deficit, the nonpartisan budget analysts conclude, because the budget office had been assuming that those cost-sharing reduction payments would continue.
But the analysts still
predict the savings because health insurers that raised their prices for the coming year to compensate for the loss of the Affordable Care Act cost-sharing payments would then need to give the government some kind of rebate for charging too much.
Another aspect of the bill by Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., would make inexpensive, so-called catastrophic health plans more available for people who buy insurance on their own. Under the Affordable Care Act, only individuals under 30 may buy such skimpy insurance. But the budget office predicts that the greater availability of catastrophic plans, through the Affordable Care Act marketplaces or other individual insurance policies, “would not substantially change” the overall number of people with coverage purchased on their own.
Even so, making such plans more available would slightly reduce how much the federal government pays for insurance subsidies under the law. The catastrophic plans would not qualify for such Affordable Care Act tax credits, but the plans would be factored into the overall typical prices for coverage under the 2010 law, lowering the average and thus reducing subsidy amounts for other customers buying plans on the law’s insurance marketplaces.
Alexander and Murray immediately issued a joint statement, using the budget office score to tout their legislation.
“This nonpartisan analysis shows that our bill provides savings and ensures that funding two years of cost-sharing payments will benefit taxpayers and low-income Americans, not insurance companies,” the senators wrote.
RISING COSTS
As window-shopping on healthcare.gov went live Wednesday, a new study — citing market instability due in part to the Trump administration’s halting of the cost-sharing payments — found that premiums for the most popular Affordable Care Act plans will rise by an average of 34 percent.
Consumers going online to view plans under the Affordable Care Act can observe the consequences themselves ahead of the Nov. 1 start of sign-up season for 2018.
The consulting firm Avalere Health crunched newly released government data and found that the Trump administration’s actions are contributing to the price increases by adding instability to the underlying problems of the health law’s marketplaces.
Trump has put the blame squarely on the Affordable Care Act, saying the program is imploding, while ignoring warnings that his administration’s actions could make things worse.
The Avalere analysis is for the 39 states using healthcare. gov. Along with the increase for silver plans, premiums also are going up by double digits for different levels of coverage, including bronze, by 18 percent, gold, by 16 percent, and platinum, by 24 percent.
Avalere said market instability is driven by Trump’s recent decision to end the cost-sharing payments to insurers, the continued debate over the repeal and replacement of the health law, and a presidential executive order that could open a path for lower-cost plans outside of the Obama-era law.
“You put all that together, and there are a lot of additional forces on top of market forces driving high premium increases for 2018,” said Chris Sloan, a senior manager with the health industry consulting firm.
Significant increases also are expected in states that run their own health insurance websites.
Anthem, a large insurer on the Affordable Care Act market, on Wednesday projected a 70 percent decline in individual enrollment for 2018, even as the company said it was on track to break even on the exchanges this year.
Chief executive Joseph Swedish also blamed market instability because of the end of the cost-sharing subsidies.
“The uncertainty around [cost-sharing reduction] subsidy funding was an important factor as we engaged in constructive dialogue with state regulators and evaluated the appropriate levels of participation,” Swedish said.
Anthem insures 1.4 million members through individual plans that comply with the Affordable Care Act — 900,000 of them through the individual exchanges, where people can access federal subsidies to help buy insurance.
JUDGE’S RULING
An effort to restore the cost-sharing payments failed Wednesday in U.S. District Court, with Judge Vince Chhabria of the Northern District of California denying a request by 18 state attorneys general, led by California Democrat Xavier Becerra, to order the payments immediately restored.
The attorneys general, which also included the District of Columbia’s, were seeking a judicial order that would have maintained the funding.
In his decision, Chhabria wrote that resuming the payments to insurers “would be counterproductive.”
Chhabria pointed out that most states’ insurance regulators had already prepared for a possible end to the money, by allowing companies to charge higher rates for the coming year.
“Although you wouldn’t know it from reading the states’ papers in this lawsuit,” he wrote, “the truth is that most state regulators have devised responses.”
The judge did not decide the central question in the suit: whether the federal government must continue funding the payments without a specific congressional appropriation.
“Both sides have reasonable arguments,” he said. But, he said, “it initially appears that the Administration has the stronger legal position” because the 2010 law did not explicitly provide permanent funding for the so-called cost-sharing reduction payments in the same way it did for a separate subsidy that helps people with Affordable Care Act health plans afford their monthly premiums.
The court ruling and other health care developments came as the internal watchdog for the Health and Human Services Department published a review of one of the administration’s first actions on the law.
According to the Health and Human Services inspector general, hours after temporary political appointees at the department were briefed on outreach activities for the final days of the previous Affordable Care Act enrollment season, they abruptly canceled plans for the activities without assessing the impact.
That cancellation in January was marked by confusion over whether the appointees wanted to stop all or part of federal contracts for outreach and ended up costing the government $1 million that could not be recouped, the inspector general found. The report was released Wednesday by two Democratic senators who had sought the inquiry.
The inquiry found that, as part of their transition briefings with an early set of Health and Human Services appointees known as a “beachhead team,” career officials sent an email Jan. 25 that detailed the work still to be done by outside contractors to encourage consumers to buy Affordable Care Act coverage before that enrollment period ended. The email provided information to be discussed at a staff meeting the next morning.
After the meeting, the inquiry found, a political appointee told the department’s public affairs officials to cancel two outreach contracts. The directive was soon altered to cancel only the outreach activities for which the government could not recover payment. However, one contractor already had halted $1.1 million worth of work that could not be recouped.
Significant increases also are expected in states that run their own health insurance websites.