Those subsidies help lower the out-of-pocket costs for consumers with incomes below 250% of the federal poverty level. Without them, insurers will likely hike rates by as much as 20%, or stop offering coverage on the exchanges altogether. Some states are publicly releasing approved 2018 rates, while others are waiting for a signal from the Trump administration that it will pay the subsidies through next year.
The notion of funding the cost-sharing reduction subsidies is gaining momentum. Sen. Lisa Murkowski (R-Alaska), a swing vote who helped kill a partial repeal of the ACA, said what matters when it comes to appropriating money for the subsidies is that both parties agree it should be done. "Whether it's one year, two years or perhaps longer, we can figure that out," she said.
Republican lawmakers stressed the need to provide states with more flexibility for 1332 waivers, and the changes they are discussing do not affect consumer protections. State commissioners and governors also called for the return of federal reinsurance funding, at least until states could design their own programs.
Despite what some observers view as progress toward a bipartisan solution, health plan executives are uncertain that lawmakers will come up with a solution in time for them to make decisions about participating on the public insurance exchanges.
"At the moment, there is not a tolerance in Congress for this kind of thing," said Chet Burrell, CEO of major marketplace insurer CareFirst, of the potential for a federal reinsurance program. Burrell, whose company sells coverage in Maryland, Washington, D.C., and Northern Virginia, said he's not optimistic that Congress will stabilize the insurance market.
Instead of waiting for a lifeline that may not come, health plans and state regulators have taken matters into their own hands by making sure plans are available in counties in danger of having no insurance options for next year and ramping up outreach for enrollment even as the federal government undermines the exchanges.
They secured what seemed like their first victory when Dayton, Ohio-based insurer CareSource volunteered to offer coverage in the final U.S. county in danger of having no marketplace insurers in 2018. That triumph proved short-lived when insurer Optima Health announced Wednesday it would reduce its presence in Virginia, leaving 48 counties and 15 administratively independent cities and towns without any exchange insurer and sending the state's regulators back to the drawing board.
Optima's withdrawal highlighted the fragile state of the individual market, which covers some 20 million individuals. Several large insurers, including Aetna, have exited the exchanges completely. Anthem, one of the dominant exchange insurers this year, continues its slow retreat. And two insurers—Northwell Health's CareConnect and Maryland co-operative Evergreen Health—are winding down operations. Both blamed the federal government's failure to correct flaws in the healthcare law.
It's important to note that a few other insurers, including Centene Corp. and Oscar Health, are actually expanding their footprints in the exchanges.
Other insurers maintain that they could pull out of the marketplace if important questions about the future funding of cost-sharing reduction subsidies and the individual coverage mandate remain unanswered.
Dan Hilferty, CEO of Philadelphia-based Independence Blue Cross and chairman of the Blue Cross and Blue Shield Association, warned that Independence may only offer off-exchange individual products in 2018 if the subsidies ultimately go unfunded. "At the end of September, we need to make a commitment," he said. "We don't take lightly the possibility of not offering products through the exchange in 2018."
Matters have grown more complicated since the CMS announced it would slash funding for marketing and outreach during the shortened HealthCare.gov open enrollment that kicks off on Nov. 1 and ends Dec. 15. The federal government will spend just $10 million on advertising and outreach to promote enrollment in the 39 state exchanges using HealthCare.gov, down from $100 million budgeted by the Obama administration last year.