New Bipartisan Health Plan Would Keep ACA Subsidies
On Tuesday, Senate Health, Education, Labor and Pensions (HELP) Committee leaders Lamar Alexander (R-TN) and Patty Murray (D-WA) unveiled a bipartisan proposal to stabilize the individual insurance market through 2019. The deal follows President Trump’s announcement that his administration would no longer make cost-sharing reduction (CSR) payments to insurers. The Alexander-Murry plan would restore this funding and bring market-based reforms and new flexibility to the states. The future of this bill is uncertain in the wake of conflicting comments from President Trump and negative reaction from some members of the House of Representatives.
While the exact bill language has yet to be released, the major provisions of the bill appear to consist of:
FUNDING FOR COST-SHARING REDUCTION SUBSIDIES
The most significant piece of the agreement is continued funding for the CSR subsidies that President Trump last week said he would no longer pay. These subsidies lower out-of-pocket costs for low-income individuals who purchase insurance through an Affordable Care Act (ACA) marketplace exchange. Without these payments, insurers would likely be forced to significantly increase premiums or pull out of the exchanges altogether. The National Council supports the continuation of the cost-sharing subsidies to help individuals with mental illness and addiction access to affordable health coverage. Read the National Council’s statement on cost-sharing subsidies here.
CHANGES TO SECTION 1332 WAIVERS
In an effort to offer more flexibility to the states, the bill would make changes to section 1332 waiver process. Note that these waivers can only impact the individual and small group markets, they do not affect state Medicaid programs (see the National Council’s 1332 Waiver Fact Sheet here).
- Streamlining approval – The deal would allow governors to unilaterally apply for waiver approval instead of first having the state legislature approving authorizing legislation. The timeline for federal approval of waiver applications would be cut in half from 180 days down to 90, and a fast-tracked approval process would be available both for emergency waivers and for those that are modeled on another state’s successful application. Additionally, the length of waiver programs would be extended to from five years to six years, and it would be more difficult for future administrations to cancel previously approved demonstrations.
- Affordability guardrail relaxed – The current section 1332 requirement that state waiver coverage is “as affordable as” ACA-based coverage would be changed so that proposals need only have “comparable affordability” with such plans. Importantly, protections for patients with pre-existing conditions and the essential health benefits requiring coverage for mental health and addiction services would remain intact.
- Catastrophic “Copper” Plans – Under the proposal, so-called Copper plans providing catastrophic coverage (meaning they have the maximum allowable deductible under the ACA) would be available to consumers of all ages, not just those under 30 as is currently the law.
- Interstate Health Insurance Compacts – The legislation would compel the U.S. Department of Health and Human Services (HHS) to issue additional regulations or guidance for states around the ACA’s Section 1333 provision regarding the creation of “health care choice compacts” to sell insurance across state lines. So far, HHS has not taken meaningful steps to implement the program.
- Funding for Consumer Outreach – The plan proposes to restore $106 million in funding to states for ACA consumer outreach efforts. If a state fails to use the funding, the federal government would be obligated to allocate their portion to enrollment advertising in that state.
- Funding for State Reinsurance Programs – Finally, the package would authorize funding for new state reinsurance polices that would subsidize expenses for higher cost or chronically ill enrollees.
Thus far, the Alexander-Murray plan has been endorsed by Senate Minority Leader Chuck Schumer (D-NY) while President Trump has sent mixed messages regarding his support of the bill. Unlike earlier health reform efforts, this bill will need to garner the votes of 60 senators for passage, which is possible given its strong bipartisan support. Thus far, the bill has 11 Republican co-sponsors and 11 Democratic co-sponsors. Some have speculated that the bill may be rolled into an end-of-year package of must-pass health care policies, including the Children’s Health Insurance Program reauthorization, community health center funding, and Medicare extender provisions.