Clash over dereg­u­la­tion could thwart bi­par­ti­san ef­forts to sta­bi­lize in­sur­ance

Modern Healthcare - - NEWS - By Har­ris Meyer

There’s near-uni­ver­sal recog­ni­tion that some­thing needs to be done to shore up the shaky in­di­vid­ual in­sur­ance mar­ket. But fledg­ling ef­forts to build con­sen­sus may not be enough to bridge an ide­o­log­i­cal di­vide.

Re­pub­li­cans and Democrats co­a­lesc­ing around the idea of tak­ing ac­tion gen­er­ally agree that cer­tain mea­sures are needed to curb pre­mium in­creases and keep in­sur­ers and health­ier cus­tomers from flee­ing in 2018. They say Congress should at least tem­po­rar­ily fund pay­ments to in­sur­ers for cost-shar­ing re­duc­tions for lower-in­come ex­change plan mem­bers and es­tab­lish a new rein­sur­ance pro­gram to pro­tect in­sur­ers from the cost of sign­ing up sicker peo- ple. Democrats seek long-term CSR fund­ing while Re­pub­li­cans are talk­ing about ex­tend­ing it for just a year or two.

There’s pos­si­ble con­sen­sus on other pro­vi­sions, such as re­peal­ing the Af­ford­able Care Act’s em­ployer man­date and its 2.3% ex­cise tax on med­i­cal-de­vice sales.

But Se­nate Health, Ed­u­ca­tion, Labor and Pen­sions Com­mit­tee Chair­man La­mar Alexan­der (R-Tenn.), who has sched­uled com­mit­tee hear­ings early next month on how to sta­bi­lize the mar­ket, wants to go fur­ther. He sup­ports let­ting ev­ery­one buy very high-de­ductible cat­a­strophic plans, eras­ing the ACA’s age cap of 30. That could con­ceiv­ably win sup­port from some Se­nate Democrats who of­fered a bill in 2014 to let in­sur­ers sell cheaper “cop­per” plans, with a lower ac­tu­ar­ial value than bronze plans. Alexan­der also might try to re­vive a bill he in­tro­duced with his Ten­nessee GOP Se­nate col­league Bob Corker ear­lier this year to help con­sumers in coun­ties where no ex­change plans are be­ing of­fered. The bill would let them use ACA pre­mium tax cred­its to buy plans sold out­side the ex­changes, in­clud­ing plans that do not com­ply with ACA cov­er­age rules.

Ma­jor in­sur­ance groups last month op­posed a Se­nate GOP pro­posal to al­low plans that don’t com­ply with ACA rules. They’d pre­fer a bill fo­cus­ing on fund­ing the cost-shar­ing re­duc­tion pay­ments and cre­at­ing a new rein­sur­ance pro­gram, and they want the Trump ad­min­is­tra­tion to pub­licly com­mit to en­forc­ing the ACA’s in­di­vid­ual man­date.

“If you give flex­i­bil­ity to the states, you ei­ther get cov­er­age gaps or frag­men­ta­tion of the risk pool,” said Chet Bur­rell, CEO of CareFirst, a Blue Cross and Blue Shield plan in Mary­land. “It might be the ba­sis of a po­lit­i­cal deal but it’s not help­ful to solve the prob­lem.”

An­other brew­ing flash point is Sec­tion 1332 of the ACA, which lets HHS grant states waivers to es­tab­lish their own cus­tom­ized cov­er­age sys­tems. Alexan­der, as well a bi­par­ti­san group of House law­mak­ers called the Prob­lem Solvers Cau­cus, pro­posed ex­pand­ing the waivers to let states do away with such ACA re­quire­ments as min­i­mum es­sen­tial health ben­e­fits.

“My sense is there’s a will­ing­ness to ex­pand state flex­i­bil­ity on 1332 waivers; it’s got a lot of po­ten­tial,” said Tom Daschle, a for­mer Demo­cratic Se­nate ma­jor­ity leader who’s now a health­care lob­by­ist at Baker Donel­son.

The key is how to give states greater flex­i­bil­ity with­out in­creas­ing fed­eral spend­ing, said G. William Hoagland, se­nior vice pres­i­dent of the Bi­par­ti­san Pol­icy Cen­ter and a for­mer se­nior Se­nate GOP staffer. One pos­si­bil­ity is let­ting states ap­ply for broad waivers that let them use the ACA’s fed­eral cov­er­age sub­si­dies to com­bine their ex­change and Med­i­caid mar­kets, cre­at­ing a more stream­lined, cost-ef­fec­tive sys­tem for both en­rollees and health plans.

De­spite the loom­ing pol­icy clashes, some ob­servers see a nar­row win­dow for a com­pro­mise deal on a mar­ket sta­bi­liza­tion bill, es­pe­cially since some Democrats in the past have sig­naled open­ness to let­ting in­sur­ers sell cheaper, skin­nier plans.

“I think the Democrats in the end prob­a­bly do swal­low some things they don’t like to get things they do like,” CareFirst’s Bur­rell said. “I would put the chances of some deal at 50-50.”

The odds would rise if Pres­i­dent Don­ald Trump car­ried out his threat to uni­lat­er­ally end cost-shar­ing re­duc­tion pay­ments to in­sur­ers or halt en­force­ment of the ACA’s in­di­vid­ual man­date, ei­ther of which could trig­ger a mar­ket melt­down.

Then, po­lit­i­cal ob­servers say, pan­icked se­na­tors of both par­ties might over­come their pol­icy dif­fer­ences and agree to pass a sta­bi­liza­tion pack­age restor­ing the CSR pay­ments. They could at­tach it to a must-pass bill such as leg­is­la­tion rais­ing the fed­eral debt ceil­ing or reau­tho­riz­ing fund­ing for the Chil­dren’s Health In­sur­ance Pro­gram.

But no one is bet­ting their life sav­ings on that hap­pen­ing, par­tic­u­larly be­cause more con­ser­va­tive House Re­pub­li­cans may balk at do­ing any­thing to res­cue Oba­macare.

“My sense is there’s a will­ing­ness to ex­pand state flex­i­bil­ity on 1332 waivers; it’s got a lot of po­ten­tial.”

Tom Daschle, a for­mer Demo­cratic Se­nate ma­jor­ity leader who’s now a health­care lob­by­ist at Baker Donel­son.

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