Senate Republicans in talks with Verma to expedite states' 1332 waivers
The Senate's two top Republican proponents for individual market exchange stabilization measures are in talks with CMS Administrator Seema Verma about making 1332 state innovation waivers easier to obtain.
Early insurance rate filings from Maryland and Virginia have shown huge premiums spikes, leading Republicans and Democrats on Capitol Hill to question which party is to blame for the hikes months before midterm elections. Sen. Lamar Alexander (R-Tenn.) said he and Verma are discussing speeding up the waiver application process, although he conceded that most of the measures he and Sen. Susan Collins (R-Maine) proposed to keep rates in check for next year would need to be enacted by Congress.
"We'll have to see," Alexander said of any potential CMS action. "Obviously most of what we proposed to do has to be done with legislation, but she might have some flexibility to change things."
Collins said Wednesday she is also talking with the CMS, but noted that the rate increases aren't a surprise. She blasted Senate Democrats for blocking her package with Alexander, which would have appropriated the cost-sharing reduction payments President Donald Trump cut off to insurers, plus a $30 billion, three-year fund for reinsurance pools to help cover high-cost patients.
"What is happening is exactly what Sen. Alexander and I predicted would happen. That is, insurers are filing enormous rate increases that the $30 billion for" reinsurance pools would have helped to offset, Collins said. "I think it is a shame that Democrats blocked us from putting it on the omnibus bill."
State representatives called for a simpler, easier 1332 state innovation waiver process during Senate health committee hearings on an early stabilization effort by Alexander and Sen. Patty Murray (D-Wash.). States have to obtain approved waivers to set up reinsurance programs.
Once it became clear that Congress wasn't going to pass a federal reinsurance program, several states moved quickly on 1332 waiver applications of their own. But not all state legislatures were in session, and most had little time to act.
Maryland, whose early rate filing are showing an average rate increase of 30%, is still waiting for approval of its 1332 waiver application that would set up a reinsurance fund. After the rates were announced on Monday, Insurance Commissioner Al Redmer said the rates could come down if the CMS approves its waiver in time, although he would not estimate by how much.
Additional states that are establishing reinsurance pools via a waiver include Wisconsin, with an initiative started by GOP Gov. Mark Walker, and Colorado. States that didn't hold a legislative session this year, like Nevada, have to wait. Alaska and Minnesota had reinsurance programs approved by the CMS before congressional talks about a federal pool gained steam.
It's unclear what the CMS could or will do to streamline the waiver process. A spokesperson for HHS said the department currently has nothing to share on potential regulatory changes or guidance.
A representative of the National Association of Insurance Commissioners said the group's recommendations for stabilizing the individual market are legislative. On the regulatory front, the group is focused on recommendations about the Trump administration's proposed expansion of association health plans and short-term, limited duration plans. The NAIC wants the government to block these plans from coming into the market in 2019 so states and carriers can adjust to them.
Insurers say the rate increase are due to increasing uncertainty. Not only is the individual mandate penalty to buy insurance effectively gone, insurers are also bracing for the potential entrance of skimpy plans that healthy people in the market could opt for instead of the full coverage mandated by the ACA—both actions promulgated by congressional Republicans and the White House.
Democratic Sen. Chris Murphy of Connecticut took to the Senate floor on Wednesday to decry healthcare "sabotage" by the congressional GOP and the Trump administration.
"What a great time to be in the healthcare business today," Murphy said. "You get a giant tax break and you get to pass along gigantic premium increases to people all across this country."
Alexander on Tuesday had choice words of his own for Democrats who blocked the stabilization measure.
"Of course [Democrats] blame President Trump and Republicans in Congress," Alexander said on the Senate floor. "It's a little like if you sold someone a house with a leaky roof and you tried to blame the new owner for that leaky roof."
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