Governors push Senate to continue cost-sharing, expansion funds

Governors are calling upon federal lawmakers to quickly stabilize the individual market by continuing cost-sharing reductions until at least the end of next year and creating a reinsurance program for high-risk patients.

In a position paper from the National Governors Association released Tuesday night, the bipartisan group called on the Senate to give states the option to operate their own risk stabilization programs with federal support. States that choose not to run their own program and participate in a federal reinsurance program should not be subject to differential match rates, the governors said.

The requests come just days before the Senate is expected to release a draft of its health reform legislation under consideration.

Should the Senate decide to suggest that insurance be sold across state lines, states should be given the option to waive out of that policy should they disagree with that practice, the governors proposed.

The state leaders also want greater flexibility to select or create essential health benefits, while retaining a default list for states that do not create their own.

Governors also urged the Senate to have any tax credits in the American Health Care Act reflect income, age and regional variation. Under the House's version of the AHCA, individuals earning below $75,000 receive tax credits based on their age to help pay for health insurance.

That will lead to some seniors not yet eligible for Medicare paying as much as 20% to 25% more in premiums compared to what they are under the Affordable Care Act, according to the Congressional Budget Office.

States that expanded their Medicaid programs under the ACA want to maintain coverage for those populations at the federal matching rate under current law, to prevent beneficiaries from losing coverage. The drafters of the proposal noted that Republican Gov. Matt Bevin of Kentucky was the sole dissenter on this point.

The ACA allows states to expand Medicaid to low-income adults up to 138% of the federal poverty level, with the federal government now paying 95% of the cost. The rate would fall to 90% by 2020. Thirty-one states and the District of Columbia expanded Medicaid.

It's unlikely this point will be agreed to by conservative lawmakers seeking to reduce Medicaid expenditures over the next decade. The CBO estimates the House version of AHCA would cut Medicaid spending by at least $800 billion over a 10-year period.