Lawmakers soldier on with insurance stabilization after White House memo
Lawmakers are moving forward with final negotiations on an individual market stabilization measure despite the Trump administration's latest requests in exchange for its support.
In a memo leaked Tuesday, the Trump administration suggested it would support funding cost-sharing reduction payments for insurers if Congress includes several other provisions in the upcoming spending omnibus, including anti-abortion language and expanding access to health savings accounts.
Two proposals in particular concern insurers. The White House requested clarification to allow renewal of short-term plans and to raise the age rating band from the Affordable Care Act's 3-1 ratio for premium variation for older enrollees to 5-1. The White House did not comment on the policies in the memo.
One insurance industry official who spoke on condition of anonymity found the memo's requests bizarre and said they contradict the administration's stated purpose of reducing the cost of premiums, since they would effectively turn the ACA into a "national high-risk pool with no way to pay for it."
The White House memo came as a surprise as House and Senate lawmakers put the final touches on a stabilization effort that includes a reinsurance fund and cost-sharing reduction payments that the Trump administration halted last October.
While Republicans and Democrats haven't cleared all the hurdles to a stabilization deal, most notably the long-standing disagreement over Hyde Amendment language that would clarify none of the federal funds could pay for abortions, negotiators expect to have the measure ready by March 13, when the House is expected to drop the text of its spending bill.
It would include cost-sharing reduction payments for future years and a reinsurance provision. Sens. Lamar Alexander (R-Tenn.), Patty Murray (D-Wash.) and Susan Collins (R-Maine) lead the efforts in the Senate. Rep. Ryan Costello (R-Pa.) has a measure in the House that incorporates CSRs with a $30 billion federal reinsurance pool.
In response to the leaked demands, Collins noted the White House has supported the Senate's stabilization efforts along the way.
"We've had very good conversations with the administration," Collins said. "I've had many conversations with them, and we're proceeding well."
Lawmakers were optimistic Wednesday that negotiations are close to being done despite the move from the White House that one Democratic aide called a "last-minute sabotage."
The insurance industry official said that if the administration is serious about these policies one concern is allowing time for the states to respond.
But some worry that states won't have enough time to respond to the changes or to assess the potential impact on their markets. Nearly all the state legislative sessions are wrapping up for 2018, and lawmakers won't be able to address these issues until 2019 or implement any policy changes of their own until 2020.
A February analysis from the Urban Institute projects that the elimination of the individual mandate penalties combined with the Trump administration's current plans to expand short-term plans, 2019 premiums for the ACA exchange plans would rise by an average of more than 18% in 43 states.
The study also estimated that federal spending on subsidies would increase by about 9.3% because the changing policies would shrink exchange enrollment.
A Blue Cross and Blue Shield Association analysis of currently available short-term plans outlines conditions the plans tend not to cover. Exclusions include maternity care, injuries from outdoor activities or sports, outpatient prescription drugs and more.
Critics blast these plans as returning to the individual market to its pre-ACA state.
"Even healthy individuals who purchase short-term plans are vulnerable," said Frederick Isasi, executive director of the liberal advocacy group Families USA. "If they have an accident or fall ill, like break a leg or get a bad case of the flu, they will find these plans provide little or no coverage for the services they need, or the plan may even retroactively cancel their coverage at the very time they need it most."
Insurers have been lobbying heavily to reinstate CSRs and set up a reinsurance fund in the last several months. On Tuesday, a coalition of provider and insurer groups led by America's Health Insurance Plans sent a letter to House and Senate leaders urging them to fund CSRs and reinsurance.
"Congress has an important opportunity to act and reduce premiums for consumers for 2019, but time is running short," the groups wrote.
The memo wasn't the administration's first injection of politics into the stabilization talks.
The initial leak to Politico followed a report by Axios that the White House Office of Management and Budget has produced a study downplaying the impact of reinsurance on individual market premiums. Collins on Tuesday said this contradicts findings by the Congressional Budget Office and analysis by the National Association of Insurance Commissioners.
Modern Healthcare reported last week that the CBO has revised its budget baseline number to reflect the fact CSRs are no longer paid. Because of the impact of CSRs on individual market premiums, which lead to an increase in subsidies the government must pay out for low-income enrollees, reinstating CSRs would save the government about $32 billion over three years, according to the CBO. This number roughly equates with the $30 billion reinsurance fund under discussion.
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