Health insurers have reluctantly signaled that they will go along with congressional Republicans' plans to repeal most of the Affordable Care Act if the legislation includes a strong replacement for the ACA provision that pressures younger and healthier people to buy coverage.
But it's highly uncertain – both procedurally and politically -- whether GOP leaders can quickly pass such a provision, which is widely viewed as necessary to avoid a chaotic meltdown in the individual insurance market where nearly 20 million Americans get coverage.
Earlier this week, America's Health Insurance Plans said one of its key conditions for accepting repeal is that if GOP lawmakers eliminate the ACA's tax penalty on people who do not buy insurance, they will immediately replace it with strong incentives for people to maintain continuous coverage. Otherwise, they warn, younger and healthier consumers will drop insurance, sicker people will stay in, costs and premiums will shoot up, and insurers will abandon the individual market in 2018.
“Replacing the individual mandate with strong, effective incentives, such as late enrollment penalties and waiting periods, can help expand coverage and lower costs for everyone,” AHIP said in a position paper. As an example, the group pointed to Medicare rules imposing higher premiums on seniors who wait to sign up for Part B, Part D and Medigap coverage. It also mentioned waiting periods or penalties for people who have had a break in private coverage.
GOP leaders have announced plans to abolish most of the ACA as early as next month through an expedited budget reconciliation bill requiring just 51 votes in the Senate. Some Republicans' ACA replacement proposals have outlined measures to encourage people to maintain unbroken coverage and avoid higher premiums and loss of coverage for pre-existing conditions.
But both Republican and Democratic experts say it's unclear whether Republicans could pass the new continuous coverage rules demanded by insurers as part of a budget reconciliation bill. Under Senate rules, such bills can only include provisions with a direct impact on the federal budget and that do not raise spending.
For Republicans to be able to get the new coverage rules into the reconciliation bill, the Congressional Budget Office and the Joint Committee on Taxation would have to decide to score them as having a federal budget impact over 10 years. The Senate parliamentarian also would have to decide whether Democrats could strike the provisions under the so-called Byrd rule, on the grounds that the provisions were “extraneous” to budget matters.
If Republicans could not get the continuous coverage rules into the reconciliation bill, they would have to pass them in separate legislation requiring 60 votes to overcome a likely Senate Democratic filibuster. That means they would have to get Democratic support.
Senate Democratic leader Chuck Schumer has said his caucus will not take part in any GOP effort to repeal the ACA without replacing it. Other Democratic observers say the Republicans won't get their party's help in passing continuous coverage rules as part of their repeal-only effort.
“Democrats will not go along with continuous coverage as an alternative,” said Tom Daschle, former Democratic Senate Majority Leader who worked with the Obama administration in crafting the ACA. “Continuous coverage doesn't solve the longer-term problems of good actuarial balance or other issues that repeal of the mandate will generate.”
Could the Republicans accomplish this on their own via the budget reconciliation route? “It's an open question at this point,” said Chris Condeluci, a Washington health policy consultant who served as a Republican staffer on the Senate Finance Committee during the drafting of the ACA. “I would argue it would have a spending impact. But then again, the parliamentarian may say that adding the continuous coverage rule violates the reconciliation rules in some way.”
“I'm not sure what the CBO or the Joint Tax Committee would score as a (budget) consequence,” said G. William Hoagland, a former senior staffer for Senate Republicans and currently a senior vice president at the Bipartisan Policy Center.
The scorekeepers, he said, could view the coverage rules as saving the government money by preventing more people from becoming eligible for Medicaid or by preventing a rise in hospitals' uncompensated care costs that could drive up Medicare and Medicaid spending. “There are a lot of steps there, and that's what the scorekeepers would have to think through,” Hoagland said.
Insurers need to know the operating environment soon because they have to calculate and submit their 2018 premiums by spring, though the incoming Trump administration may be able to delay the filing deadline by several months. In addition to passing a continuous coverage rule, Marilyn Tavenner, AHIP's CEO, said during a Modern Healthcare event Wednesday that the Republican Congress needs to do several other things to keep her members in the market in 2018 and avoid disrupting coverage for millions of people.
The most immediate need to avoid a market collapse, she said, is that lawmakers must appropriate funding for payments to health plans to cover their expenses in reducing low-income members' cost-sharing responsibilities. She said maintaining the ACA's Medicaid expansion to low-income adults is also important. Experts say having Medicaid cover these low-income people with costly medical needs makes the individual market more financially viable for insurers.
Tavenner also wrote in an op-ed column Wednesday that to keep insurers in the market, Republicans need to preserve premium subsidies for low- and moderate-income people to make coverage affordable; fund risk protection payments to insurers that sign up sicker people; and eliminate the ACA's health insurance premium tax.
Some insurance leaders would like to see the Republicans keep the ACA's individual mandate, which they view as the most effective method of ensuring that insurers get an adequate number of healthier enrollees to offset the costs of sicker members. “The strongest way to balance the risk pool is to have a requirement for coverage,” said Karen Ignagni, CEO of Emblem Health and former CEO of America's Health Insurance Plans. “Can you construct other systems? It all depends on the design of a continuous coverage approach.”
But it would be very tough politically for President-elect Donald Trump and congressional GOP leaders to even temporarily keep the individual mandate because that's the least popular part of the law for them and their voters. While large majorities of Americans, including Republicans, support key ACA provisions such as the premium subsidies, Medicaid expansion, and barring insurers from denying coverage based on a person's medical history, most people do not favor the mandate, according to a recent Kaiser Family Foundation poll.
Hoagland said Democrats will have a strong interest in working with Republicans to pass continuous coverage rules to prevent the market from unraveling and masses of people losing coverage. “Democrats could sit back and say, 'You broke it, you own it, take the consequences,' ” he said. GOP leaders may respond by warning Democrats that if they don't vote for the new coverage rules, “You will create the disruption, not us.”
“This is high-stakes politics,” he warned.
(This story was updated on Dec. 9, 2016)