The U.S. Senate Committee on Health, Education, Labor and Pensions continues its hearings on healthcare policy today.
The committee will hear testimony today on providing states greater flexibility in managing health insurance and healthcare issues. Those scheduled to testify are: Michael Leavitt, former Utah Governor and Secretary of Health and Human Services; Allison Leigh O’Toole, Chief Executive Officer, MNsure; Tarren Bragdon, CEO, Foundation for Government Accountability; Bernard J. Tyson, President and Chief Executive Officer, Kaiser Foundation Hospitals and Health Plan, Inc.; and Tammy Tomczyk, a Senior Principal And Consulting Actuary.
It seems that the committee’s efforts will not be opposed by President Trump. He signaled on Twitter yesterday that he is moving on from the failed Republican-led effort in Congress to repeal and replace Obamacare to tax reform. “Republicans, sorry, but I’ve been hearing about Repeal & Replace for 7 years, didn’t happen!,” President Trump tweeted. In a separate tweet he added, “Republicans must start the Tax Reform/Tax Cut legislation ASAP. Don’t wait until the end of September. Needed now more than ever. Hurry!”
Sen. Lamar Alexander, R-Tenn., the committee chair, is in a bit of a hurry to forge a bipartisan agreement on healthcare by the end of this week. He would like to see limited legislation by the end of the month to stabilize government health exchanges and providing certainty that CSR payments to insurance companies that offer health insurance plans on the exchanges will continue.
New insurance rates for 2018 are to be posted on the government’s website, healthcare.gov., by Sept. 27.
Last Thursday, in the second in a series of four hearings, the committee received testimony from the governors of Colorado, Massachusetts, Montana, Tennessee and Utah. They all urged Congress to continue cost sharing reduction payments (CSRs) through 2019 to help insurance companies offer lower premiums and deductibles on the government healthcare exchanges. Some also encouraged expanding provisions in the ACA that would allow states more flexibility to address unique healthcare policy issues.
Gov. John Hickenlooper (D-Colorado) said that 600,000 residents of Colorado have health insurance through the ACA, but they are struggling with increasing costs and lack of choice in insurance plan offerings. He said Colorado’s Western slope — which includes some of our most rural areas — has 14 counties with only one insurer on the exchange. “A 60 year old in rural Craig, Colorado making less than $50,000 will pay over $12,000 per year on premiums alone — around 25 percent of income,” said the Governor. “That is simply unacceptable.”
Among the recommendations delivered by Gov. Hickenlooper was a request to continue funding cost sharing reductions (CSRs) to insurance companies at least through 2019. “Funding the CSRs for 2018 only will put us right back where we are now in a matter of months,” said Gov. Hickenlooper. “It will foster uncertainty surrounding these payments, threatening to drive up premiums and force insurers out of the market. We also need your support as we work to stabilize the market by creating a stability fund, that will help us set up reinsurance or similar programs.”
Gov. Charlie Baker (R-Massachusetts) supported Congress continuing to make CSR payments. “Carriers need certainty in order to finalize rates for plan year 2018 and begin preparing rates for plan year 2019, and providers and employers also need certainty about what those rates are going to be,” he said. “Month to month resuscitation of cost sharing reductions is not stabilization; they should be maintained for at least two years. I cannot stress enough how critical it is for federal cost sharing reduction payments to be resolved affirmatively in order to maintain market stability and to constrain rate increases.”
He urged Congress to provide states more flexibility in addressing healthcare reforms by broadening Section 1332 of the Affordable Care Act (ACA), which permits a state to apply for a State Innovation Waiver to pursue innovative strategies for providing their residents with access to high quality, affordable health insurance while retaining the basic protections of the ACA. State Innovation Waivers can be provided to states to implement innovative solutions to provide access to quality health care provided that certain guardrails are met: The solution must meet the following three protections: (1) is at least as comprehensive and affordable as would be provided absent the waiver, (2) provides coverage to a comparable number of residents of the state as would be provided coverage absent a waiver, and (3) does not increase the federal deficit.
He also asked that Congress consider reinstituting a reinsurance program to address the higher costs of the least healthiest Americans as a way to help stabilize insurance markets. A reinsurance program was part of the ACA’s implementation in 2014.
Gov. Baker said any solutions needed to be supported by both Democrats and Republicans. “Bipartisan collaboration is going to be essential to achieve affordable health care coverage and stabilize the insurance market,” he said.
Gov. Steve Bullock (D-Montana) said the most important step Congress could take to stabilize insurance markets would be to extend CSR payments for at least the next two years. “Montana has three carriers offering insurance on the exchange,” he said. “The Administration’s mixed – and at times hostile — signals regarding the CSR payments and other destabilizing actions has led Montana’s largest insurer to propose a rate hike for next year that’s 10 times higher than it would have been under current provisions of the ACA.”
The governor said that the ACA had reduced Montana’s rate of uninsured 20% in 2013 to 7% in 2017. He credited Medicaid expansion in 2016, the growth in the individual market as a result of premium tax credits, and the elimination of underwriting and pre-existing condition exclusions as significant factors driving that reduction.
“While the individual marketplace is a relatively small percentage of all Americans covered, it’s instability not only impacts millions of Americans, but also has impact beyond the percentages,” said Gov. Bullock. “I believe we can find common ground in driving down costs and stabilizing the marketplace, and the time to act is now. Bipartisanship on an issue as difficult as health care can be challenging, yet it is not impossible.”
“At the end of the day, health care is about people, not politics or posturing,” he added.
Gov. Bill Haslam (R-Tennessee) voiced similar concerns. “Tennessee finds itself with only three insurance carriers offering ACA-compliant coverage,” he said. “In more than 80 percent of our counties, citizens have only one insurance option. These limited options are provided to Tennesseans at substantial cost increases – possibly as much as 40 percent for 2018, after increases totaling as much as 139 percent for some from 2014 to 2017. Tennessee’s experience of fewer choices at higher costs is not sustainable. We are on a path where citizens simply won’t have an option to purchase from the insurance marketplace or can’t pay for the limited options available to them. Either way, the system fails.”
Gov. Haslam urged Congress to fund CSRs, create a short-term reinsurance program, and provide flexibility to states to address their unique challenges and circumstance by changing the State Innovation Waiver approval process. “The waiver approval process should be expedited, and the strict guardrails currently placed upon waiver requests should be loosened in a manner that will attract younger, healthier individuals to the marketplace,” he said. “Examples of guardrail relief include more flexibility around rate bands and plan design. Simply put, without more flexibility, carriers will be left with two choices – leave the individual market or raise rates.”
Gov. Gary Herbert (R-Utah) also supported extending CSR payments through 2019. “I do not believe that cost sharing reduction (CSR) payments are the most transparent and effective way to assist low income individuals,” he said. “Nevertheless, in the near term, our individual insurance markets need predictability in order to price their products adequately. The sudden demise of CSR support would destabilize Utah’s individual insurance market. “
Like many of his fellow governors, he supports providing more flexibility for states by “dramatically simplifying” the State Innovation Waiver process under Section 1332. “Please allow each of the states, in their various hues of blue, red and purple, to take on the primary role of regulating their health insurance markets,” he said. “Instead of foisting huge social and economic experiments on the entire country — too often along narrow party-line votes — Congress has an opportunity to diversify the social, economic and political risk associated with major policy change by letting the portfolio of states experiment with what works and what doesn’t.”
You can watch video of the committee hearings, as well as download the testimony of the governors who offered testimony at this link.
