WASHINGTON --- Trust. It's the missing ingredient in congressional efforts to stabilize the individual insurance market as Republicans move to repeal and replace the Affordable Care Act.
That was clear during a House committee hearing Thursday on four GOP bills to address various problems insurers say are forcing them to consider leaving the individual market in 2018. A mass exit would jeopardize coverage for the nearly 20 million Americans who have individual policies.
“Today we begin the important work of laying the foundation to rebuild America's healthcare markets as we dismantle Obamacare, especially saving the individual market from total collapse,” Rep. Greg Walden, the Republican chairman of the Energy and Commerce committee, said in his opening statement.
“The idea this is collapsing is not true,” retorted Rep. Frank Pallone, the ranking Democrat on the committee. “The Affordable Care Act will have problems because you and President Trump are working to make it collapse.” He cited the Trump administration's recent cancellation of ACA enrollment ads just before the final open enrollment push, which many believe dampened signups by eagerly sought younger customers.
The four bills discussed Thursday reflect the GOP strategy of replacing Obamacare through a number of separate measures rather than one large bill. Republicans hope some of these individual pieces could draw support from Democrats, who want to make the ACA markets work.
The bills would give insurers greater leeway to charge older customers higher premiums; make it harder for people to sign up for coverage outside of the annual open enrollment period due to changes in life circumstances; shorten the period during which people would have coverage if they miss premium payments; and establish an alternative to the ACA's individual mandate to encourage people to buy and keep insurance.
On Wednesday, HHS proposed a rule to stabilize the insurance markets, but it contained no details as of Thursday evening. There is speculation that it may address some of these same issues targeted by the House GOP bills.
But Democrats say before they consider these measures, they want to make sure Republicans, who for seven years have demanded the law's repeal, truly want to fix its problems rather than demolishing its patient protections and expansion of coverage to up to 30 million Americans.
“They need to prove their sincerity,” said Democratic Rep. G.K. Butterfield of North Carolina.
Faced with the complexity of repealing and replacing the law, some Republicans like Walden increasingly are talking about “repairing” the law rather than eliminating it, and keeping its taxes to fund replacement coverage. But hard-line House conservatives, joined by Senate Finance Committee chairman Orrin Hatch, are insisting on rapid repeal, with some type of alternative model to come later. They denounce anything less as “Obamacare lite.”
In the meantime, however, insurers and hospital systems are pleading for fast action to shore up the individual insurance markets. Aetna, Anthem, and other insurers warn that if policymakers don't give them the new rules of the road very soon -- before they have to file their 2018 plan offerings and rates this spring – they may exit the market.
But there was no discussion of insurers' main recommendations for stabilizing the individual market. On Wednesday, Marilyn Tavenner, CEO of America's Health Insurance Plans, told the Senate HELP Committee that Congress needs to fund payments to insurers for the ACA's required cost-sharing reductions for low-income enrollees; preserve the law's premium subsidies to make coverage affordable; and restore risk payments to health plans that sign up sicker members. Those provisions face strong opposition from conservatives, who have blasted them as corporate “bailouts.”
“The Republicans should put a bill up to fund the cost-sharing reductions, and Democrats would vote for that,” said a veteran healthcare industry lobbyist who did not want to be named.
Tavenner also said it's critical to keep the law's requirement that nearly everyone buy insurance, which many experts say is needed to get younger, healthier customers into the market to balance the costs of older, sicker people. But the individual mandate is one of the GOP's top targets for quick repeal.
Surprisingly, there was not a lot of detailed discussion at the hearing of the four Republican market-stabilization bills. But there was concern expressed by Democrats and one of the witnesses, Dr. Len Lichtenfeld of the American Cancer Society, about how the bills would affect access and affordability for older people and those with preexisting conditions.
One GOP bill would let insurers charge older members five times more than younger people, rather than the ACA's current limit of three times more.
Insurers argue this would enable them to attract more younger, healthier members to offset the high costs of older, sicker enrollees, and more accurately reflect the higher costs associated with older members.
But some experts predict it would make coverage unaffordable for older people and force some to drop coverage, while doing little to make premiums more affordable for younger people. AARP wrote a letter to the committee calling it a “bad deal for Americans.”
“You've really hit a nerve in Florida, asking older people to pay more before going into Medicare,” said Rep. Kathy Castor, a Florida Democrat, who warned that would price some older customers out of the insurance market.
A “discussion draft” bill offered by Walden to accompany an ACA repeal bill would keep the law's prohibition against insurers denying coverage to people based on preexisting conditions.
But unlike the ACA, his legislation would only apply guaranteed issue to people who have maintained continuous coverage, though the draft bill does not yet have any language describing the continuous coverage rules. And based on the discussion during the hearing, the bill would allow insurers to set premiums on health status, meaning that premiums could be unaffordable for people with serious medical conditions.
That drew scathing criticism from Pallone and Butterfield. “It's disheartening to see a half-written plan,” Butterfield said. “We are willing to work with you. But what are we talking about? Reducing people's access to care and making it more expensive."
Walden seemed wounded by the criticism, noting that he has battled insurers that wrongly denied people coverage and seen the problems associated with serious illness up close in his family. “The notion that we don't care is beyond the pale,” he said.
Douglas Holtz-Eakin, former director of the Congressional Budget Office and a policy adviser to Republican Sen. John McCain's 2008 presidential campaign, told the committee that the four bills reflect “sensible policy that could garner bipartisan support.” Without such fixes, he warned, the individual market could well implode.
Asked after the hearing whether he thought the bills could get Democratic support, he was not optimistic. “The tone was very disappointing,” he said.