WASHINGTON – Sen. Lamar Alexander (R-Tenn.) wants two quick fixes to stabilize the individual health insurance market so that Congress can come together to craft a long-term solution.
There seems to be “general consensus that we should see what can we do, No. 1, on the cost-sharing payments and, No. 2, on amending 1332 [waiver program] to provide flexibility to the states,” Sen. Alexander*, chairman of the Senate Health, Education, Labor, and Pensions Committee said Sept. 6 after the first of four hearings the committee is holding on creating stability for the individual health insurance market.
Chairman Alexander said that he hopes to have a small, passable legislative proposal ready by Sept. 14, in time to allow insurers to make last-minute adjustments to their individual market bids, which are due to state insurance commissioners by Sept. 20.
Sen. Patty Murray (D-Wash.), the committee’s ranking member, stressed the urgent need to pass a quick fix, noting that insurance premiums could rise as much as 20% higher than they would have, if there is no guarantee on the cost-sharing reduction (CSR) payments.
A panel of state insurance commissioners all agreed with the two proposals, though there were suggestions that the CSR payments should be guaranteed for at least a year, if not longer, beyond 2018, which was when Chairman Alexander suggested the guarantee should sunset.
“The CSR funding issue is the single most critical issue you can address to help stabilize insurance markets in 2018,” Julie Mix McPeak, commissioner of the Tennessee Department of Commerce and Insurance, testified at the hearing. She emphasized that it is not an insurance bailout. “CSR funding ensures that some of our most vulnerable consumers receive assistance for copays and deductibles that are required to be paid under federal law and has the effect of reducing proposed premium increases and has a direct impact on the amount of subsidy assistance provided by the federal government.”
“You must permanently fund the cost-sharing reduction payments,” Mike Kreidler, insurance commissioner for the state of Washington, testified during the hearing. “That is something that is going help a great deal in our marketplace.”
The commissioners also advocated for a reinsurance program.
Ms. McPeak called for Congress to “establish a reinsurance mechanism that would stop losses for individual claims at a specified amount to increase market participation by carriers. For the most immediate impact, this backstop mechanism must be federal, as it would be impossible for many states to develop such a program for the 2018 plan year.”
“I urge you to create a federal reinsurance program this year,” Mr. Kreidler said. “Doing this would show your commitment to stabilizing the market. They worked very well in the state of Washington for the first 3 years we had a reinsurance program. We would like to see it continue and go forward.”
In talking about fixing 1332 waivers, which allow states to develop a specific proposal that works within the parameters of the Affordable Care Act but offers flexibility to create programs that are unique to a state’s needs, Lori Wing-Heier, director of the Alaska Division of Insurance talked about her state’s successful efforts to get a wavier for its reinsurance program.
“The waiver process is somewhat onerous in the fact that there is not a defined application to submit,” Ms. Wing-Heier said, leaving it up to states to make sure they are providing all the requested information. “After that, the part that is stifling states right now is the 6-month waiting period before they receive final approval.”
Other issues were raised by both panelists and senators, including the cost of delivering health care, the cost of prescription drugs, and cuts to marketing budgets, but Chairman Alexander said that he did not want to expand a proposal beyond his two points.
“My whole focus right now is: What can we do to take a couple of steps to stabilize the individual market?” he said, although he suggested that if there were clear consensus on other aspects, they could be considered.
The archived hearing can be viewed on the committee’s website.
CORRECTION, 9/8/17: An earlier version of this story misidentified the HELP Committee chairman.