A measure to fund reinsurance and cost-sharing reductions has stalled after months of political wrangling as U.S. House of Representatives lawmakers scramble to agree on text for the mega-spending bill that was expected to drop early Monday evening.
Republican congressmen Monday night blamed Democrats for the breakdown of negotiations on healthcare provisions in the spending omnibus bill. Democrats opposed policies in the omnibus text released Monday by Sen. Lamar Alexander (R-Tenn.), including an amendment that bars federal funds from paying for abortions. While the so-called Hyde Amendment applies to programs like Medicaid and the Children's Health Insurance Program, it has not been applied to the Affordable Care Act.
"We wouldn't go along without the Hyde Amendment, and that's where it is," said Rep. Phil Roe (R-Tenn.).
The breakdown in negotiations means the healthcare spending provisions have been dropped from the omnibus spending bill, although they could be revived later in another bill
It's a blow to insurers, many of whom see the omnibus as the last chance to pass a market stabilization measure before setting rates for 2019. A study by the consulting firm Milliman projected reinsurance could lower premiums by at least 40%
Tensions over the legislation driven by Alexander and Sen. Susan Collins (R-Maine) came to a head Monday. Alexander, one of the lead negotiators on the deal, released the full text of a plan he had floated to lawmakers the previous week.
A coalition of insurers, provider and patient groups including America's Health Insurance Plans, the American Medical Association, the American Hospital Association and the Federation of American Hospitals signed on to a letter this weekend urging Congress to pass a stabilization measure that includes CSRs and reinsurance.
So far, the coalition has not released a statement on the Alexander legislation. An AHIP spokesperson said the association "has vocalized support for measures that would include CSR funding and reinsurance."
Alexander's legislation combined previous measures by Alexander, Collins and Rep. Ryan Costello (R-Pa.) and included provisions that would codify the sale of insurance across state lines for association health plans, expand anti-abortion language known as the Hyde Amendment to the Affordable Care Act, and demand clear consumer guidelines to accompany sale of short-term insurance plans.
Along with these provisions, the legislation would authorize a three-year, $30 billion reinsurance fund as well as three years of CSRs.
Yet expansion of the Hyde amendment and setting up association health plan regulation in statute are nonstarters for Democrats, a senior Democratic aide said.
The latest hurdle underscores the volatile nature of the individual market, which analysts have said is a key driver of rising premiums.
Policy certainty is a huge motivator for carriers deciding whether to stay in the individual market, according to a new report by the Urban Institute as part of an ongoing study of insurance and the Affordable Care Act funded by the Robert Wood Johnson Foundation. That certainty may be threatened by the Trump administration's expansion of short-term plans and association health plans, which could affect their market share and risk, according to the report.
As the stabilization debate sputtered, the comment period on the Trump administration's association health plans proposal wrapped up. Alexander's proposal would have elevated their status in law by requiring HHS to issue regulations allowing sale of insurance across state lines.
In one comment letter, the Blue Cross and Blue Shield Association urged the administration to maintain the rights of states to regulate insurance plans, and also voiced concerns that the plans could be exploited by bad actors who could cherry-pick enrollees or set up scam operations.
"It has taken decades for the (U.S. Labor Department) and state regulators to create a workable regulatory framework that supports legitimate associations that meet the requirements of current federal guidance as additional options for small group employers," wrote Kris Haltmeyer, vice president of legislative and regulatory policy for the Blues. "During this period, thousands of employees were left with hundreds of millions of dollars in unpaid claims."
Insurers have been pushing hard for reinsurance and CSRs; analyses by the Congressional Budget Office and Milliman have shown that both these measures would reduce premiums significantly.
But others have expressed more caution.
Nick Ortner, a consulting actuary for health at Milliman, said that the benefits of the reinsurance provision especially depend on the regulation's specifics and whether the reinsurance money will kick in for a multitude of medium-cost claimants or offer protection for a few, very expensive claims.
Another question is whether the reinsurance money would go toward a particular claim or group of claims versus an individual, and if insurers could carve out some expenses, such as high-cost prescription drugs.
"The details aren't important until they are," Ortner said.
Beyond stabilization, a broader agreement over the $1.2 trillion spending omnibus still has not been reached even though the House had hoped to finalize its legislation March 14. Once the House passes its version, the Senate will have a chance to modify it.
Other healthcare measures fell out of the omnibus discussions, including reforms to the VA Choice program, which broke down in the face of opposition from the House Democratic leadership, according to a White House aide.
