The Senate Health, Education, Labor and Pensions (HELP) and Finance Committees continued their hearings this week on ways to improve market stability ahead of the 2018 plan year. The hearings showed increasing support for finding a compromise between Democrats and Republicans that would allow for the ACA’s cost sharing reduction (CSR) payments and provide for additional flexibility for states to implement the law. One of the suggestions was to have a pre-approved slate of possible changes under the ACA’s Section 1332 Waiver program for states to select from that could be quickly implemented, while HELP Chairman Lamar Alexander (R-TN) suggested that they should also consider easing federal benefit design rules so that states can better tailor plans to the needs of their population.
On Tuesday, the Senate Finance Committee held a hearing on healthcare costs and coverage issues, particularly with regard to increasing premiums, prescription drug costs, and overall market stability. Witnesses include former Centers for Medicare and Medicaid Services (CMS) Acting Administrator Andy Slavitt, Avik Roy from the Foundation for Research on Equal Opportunity, Ed Haislmaier from the Heritage Foundation, and Aviva Aron-Dine from the Center on Budget and Policy Priorities. Much of the discussion revolved around ways that states can gain additional flexibility within their own health markets, including with the ACA’s waiver program as well as other proposals being offered such as the Graham-Cassidy plan. Ranking Member Ron Wyden (D-OR) suggested that those waivers could also be used to implement a public option or single-payer plan within a state.
There was some disagreement among the panelists and the senators over how much flexibility should be provided to states to innovate within their own health markets, with some preferring more federal standardization and others arguing that more flexibility will improve competition and the quality of care. Ed Haislmaier noted that there are effectively two distinct markets, with one population that is subsidized and one that is not, and that solutions to stabilize the market need to recognize this. Many of the senators sought solutions on how to bolster enrollment in the individual market, including questioning the effectiveness of the individual mandate and whether a continuous coverage requirement would be able to attract more enrollees. Finance Chairman Orrin Hatch (R-UT) said he hoped for a bipartisan bill that could eliminate or change the ACA’s coverage mandates, while Wyden argued that Medicaid expansion could help, as rates for expansion states were 7% lower than non-expansion states.
Also on Tuesday, the HELP Committee held a hearing on state flexibility with former Health and Human Services Secretary and Governor of Utah Mike Leavitt, MNsure CEO Allison Leigh O'Toole, Kaiser Permanente CEO Bernard Tyson, actuary Tammy Tomczyk and free-market proponent Tarren Bragdon. The hearing was designed to provide a dialogue among healthcare experts on how states can stabilize their markets and reach a consensus on bipartisan legislation. As with the Finance Committee hearing, much of the discussion focused on how states can use additional flexibility. Items of interest were establishing state-specific reinsurance programs, the 1332 waiver program and the Section 1115 Medicaid expansion waiver program and the CSR program, as well as changes to essential health benefits (EHBs) and age-rating bands.
The panelists at this hearing largely agreed with the consensus that the CSR program should be fully appropriated by Congress, which is likely to be one of the core items in any market stability bill, as well as appropriating funds for reinsurance programs. The panel also suggested that rather than one-off proposals for the 1332 waiver program, that there should instead be a set menu of options for states to choose from that can be quickly implemented. They also suggested that the waivers should allow states to have a long-term outlook, with budget neutrality considered over the term of the waiver instead of on an annual basis, and that the Medicaid waiver program should be combined with the 1332 program. As with the Finance hearing, there was also discussion of providing for greater flexibility for each state determining its EHBs.
The HELP Committee held another hearing on Thursday with healthcare stakeholders, including President of Healthy Tennessee Manny Sethi, CEO of Marshfield (WI) Clinic Health System Susan Turney, Anthem Individual Market Vice President Robert Ruiz-Moss, South Carolina Department of Insurance Director and NAIC Secretary-Treasurer Raymond Farmer, and Christina Postolowski from Young Invincibles. This hearing was to hear the perspectives of physicians, hospitals, patients, and insurers on ways to improve the market and provide stability, with many of the comments echoing those of the hearings held over the past two weeks.
Panelists specifically called for more predictability in the healthcare market, with a stable regulatory environment and government funding, and for a balanced risk pool. One idea that has started to gain interest was the introduction of a copper plan that would have a 50% actuarial value and could help get younger, healthier consumers to enroll. This concept has been introduced as legislation in previous years, with former Senator Mark Begich (D-AK) being among the more vocal supporters of this idea. He along with current Senators Heidi Heitkamp (D-ND), Angus King (I-D-ME), Joe Manchin (D-WV) and Mark Warner (D-VA), and former Senator Mary Landrieu (D-LA), introduced the Expanded Consumer Choice Act in 2014 that would provide this level of coverage to help encourage healthier consumers to sign up for plans with lower premiums but higher cost-sharing.
With these hearings held, it is expected that HELP Chairman Alexander and Ranking Member Murray will be releasing a draft plan for a market stability bill as soon as next week. There would need to be a quick turnaround for this legislation so that states and insurers would have time to react to any changes made that could affect rates for the coming year. While there is near universal agreement that the CSRs should be funded, Republicans are unwilling to concede that funding without receiving something in return, likely in the form of more state flexibility. But at this point, Democrats have been unwilling to lessen the federal standards for plan design in the fear that it could erode consumer protections built into the law. This will be the challenge for Alexander and Murray to find some sort of compromise where there are enough willing Democrats and Republicans in both chambers to agree on a bill. For his part, Senate Majority Leader Mitch McConnell (R-KY) seems very willing to move a bipartisan stability bill, and this week President Donald Trump suggested he may support the package if it attracts bipartisan support.