With ACA re­peal dead, shoring up in­di­vid­ual mar­ket takes cen­ter stage

Modern Healthcare - - NEWS - By Mara Lee

The dra­matic col­lapse of the GOP’s ef­forts to re­peal and re­place the Af­ford­able Care Act has, for now, min­i­mized the threat of sig­nif­i­cant Med­i­caid fund­ing cuts. All eyes now turn to what the Trump ad­min­is­tra­tion and Congress will do about a shaky in­di­vid­ual in­sur­ance mar­ket.

The ad­min­is­tra­tion could put its thumb on the scale for an Oba­macare fail­ure that it has been root­ing for by cut­ting off cost-shar­ing re­duc­tion pay­ments to in­sur­ers. Thus far, Pres­i­dent Don­ald Trump has threat­ened to let the sys­tem go into freefall, but hasn’t fully fol­lowed through since the ad­min­is­tra­tion has con­tin­ued to make those crit­i­cal pay­ments.

“As I said from the be­gin­ning, let Oba­macare im­plode, then deal. Watch!” the pres­i­dent tweeted at 2:25 a.m. Fri­day, barely an hour af­ter the Se­nate failed in a 49-51 vote to pass a so-called skinny re­peal of the ACA. Repub­li­can Sens. John Mc­Cain, Su­san Collins and Lisa Murkowski crossed the aisle to vote with all 48 Democrats and kill the re­peal-and-re­place ef­fort.

De­spite the early morn­ing tweet, the ad­min­is­tra­tion’s stance to­ward cost-shar­ing re­duc­tion pay­ments, which are used to help in­sur­ers off­set the cost of pro­vid­ing more af­ford­able plans to low-in­come peo­ple, is hazy.

“We are still con­sid­er­ing our op­tions,” White House spokesman Ninio Fe­talvo said.

Ti­mothy Jost, a health­care re­form ex­pert and emer­i­tus law pro­fes­sor from Wash­ing­ton and Lee Uni­ver­sity, Lex­ing­ton, Va., thinks the most likely path is for the ad­min­is­tra­tion to keep mak­ing the pay­ments, but that Trump will con­tin- ue to threaten to stop them.

“Trash talking has its own ef­fect,” Jost said. “We could see An­them with­draw from all the mar­kets in all the states if they think he’s about to do some­thing re­ally stupid.”

The need to ad­dress the in­di­vid­ual mar­ket, how­ever, isn’t lost on some Se­nate lead­ers. Even be­fore last week’s floor de­bate, Sen. La­mar Alexan­der (R-Tenn.), chair­man of the Health, Ed­u­ca­tion, La­bor and Pen­sions Com­mit­tee, said he would hold hear­ings on health poli- cy. At about 3 a.m. Fri­day, he put out a state­ment say­ing that the failed vote “leaves an ur­gent prob­lem that I am com­mit­ted to ad­dress—Ten­nessee’s state in­sur­ance com­mis­sioner says our in­di­vid­ual in­sur­ance mar­ket is very near col­lapse.”

Sen. Amy Klobuchar (D-Minn.) said she has faith in Alexan­der’s abil­ity to get com­plex leg­is­la­tion done. She noted that Min­nesota and Ten­nessee have added rein­sur­ance to their ACA mar­kets, and that should be a pri­or­ity na­tion­ally.

Rep­re­sen­ta­tives of in­sur­ers are also press­ing for a so­lu­tion, in­clud­ing per­ma­nent CSR ap­pro­pri­a­tions and re-in­sur­ance.

“We will con­tinue to work on so­lu­tions to en­sure a smooth open-en­roll­ment pe­riod and to sta­bi­lize the in­di­vid­ual in­sur­ance mar­ket for the long term,” said Jus­tine Han­del­man, se­nior vice pres­i­dent of pol­icy and rep­re­sen­ta­tion at the Blue Cross and Blue Shield As­so­ci­a­tion.

But it’s not clear whether there are a dozen Se­nate Repub­li­cans who want to spend bil­lions on restor­ing rein­sur­ance

“As I said from the be­gin­ning, let Oba­macare im­plode, then deal. Watch!” the pres­i­dent tweeted at 2:25 a.m. Fri­day, barely an hour af­ter the Se­nate failed in a 49-51 vote to pass a so-called skinny re­peal of the ACA.

in the in­di­vid­ual mar­ket.

“Bail­ing out in­sur­ance com­pa­nies with no thought of any re­form is not some­thing I want to be a part of,” Se­nate Ma­jor­ity Leader Mitch McCon­nell said shortly af­ter Fri­day’s vote. There’s also no guar­an­tee that House Speaker Paul Ryan would al­low a bi­par­ti­san bill of that kind on his side of the Capi­tol, es­pe­cially given the hard line some in the Free­dom Cau­cus have been tak­ing on fed­eral spend­ing.

Chris Ja­cobs of the Ju­niper Re­search Group, a for­mer pol­icy staffer for the Se­nate Repub­li­can Pol­icy Com­mit­tee and for Vice Pres­i­dent Mike Pence when he served in the House of Rep­re­sen­ta­tives, said he’s more op­ti­mistic than most that Repub­li­cans in the Se­nate will take an­other stab at re­peal­ing some part of Oba­macare, though he didn’t ex­press con­fi­dence some­thing would pass.

“McCon­nell may think he’s done with health­care, but I don’t know that health­care’s done with him,” he said.

Com­mu­nity Health Op­tions CEO Kevin Lewis, whose com­pany serves about 33,000 on Maine’s ACA ex­change, would also like to see Congress fix the ACA’s af­ford­abil­ity prob­lems for those who don’t get sub­si­dies or get rel­a­tively small ones. A 60-year-old non­smoker in Maine who doesn’t get a sub­sidy will pay $764 a month for a bronze plan in Port­land next year, as­sum­ing Com­mu­nity Health Op­tions’ re­quest is ap­proved. That’s a 20% in­crease from this year.

Lewis said get­ting fed­eral rein­sur­ance back for cus­tomers who make $90,000 to $250,000 a year in claims could mod­er­ate those in­creases by 5 per­cent­age points.

While the fu­ture is still hazy for in­sur­ers in the in­di­vid­ual mar­ket, the sit­u­a­tion looks a lit­tle more se­cure for hos­pi­tals and other providers who have re­lied on Med­i­caid ex­pan­sion to bol­ster the ranks of the in­sured.

Julius Hob­son Jr., a health­care lob­by­ist with Polsinelli, said this vote showed a ma­jor­ity of Repub­li­cans do not sup­port scal­ing back spend­ing on Med­i­caid, either gen­er­ally or for the Med­i­caid ex­pan­sion pop­u­la­tion.

The House bud­get res­o­lu­tion, which is needed to set the stage for a vote on tax re­form in the Se­nate, con­tains $200 mil­lion in en­ti­tle­ment cuts with changes to Med­i­caid and Medi­care. Although ap­proved by the Bud­get Com­mit­tee, it has not had a vote on the floor be­cause mod­er­ate Repub­li­cans do not sup­port those cuts.

“I think they have the same prob­lem on the bud­get res­o­lu­tion as they had in health­care. The Repub­li­cans have di­vi­sions among them­selves that are al­most in­sur­mount­able,” Hob­son said. “I would say Med­i­caid is safe un­til the next elec­tion.”

Ja­cobs said that could be true, but that it will take a few months to be sure.

Ul­ti­mately, though, Ja­cobs thinks en­ti­tle­ment re­form has to be on the ta­ble.

“If some Repub­li­cans don’t want to touch Med­i­caid, the pres­i­dent doesn’t want to touch Medi­care, that’s just not a fis­cally sus­tain­able dy­namic,” he said.


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