Insurance commissioners say help offered by Congress is not enough to save market

Sep 8 2017

A key Senate committee Wednesday launched a set of hearings intended to lead to a short-term, bipartisan bill to shore up the troubled individual health insurance market, but a diverse group of state insurance commissioners united around some solutions that were not necessarily on the table.

Sen. Lamar Alexander (R-Tenn.), the chairman of the Health, Education, Labor and Pensions Committee, said at the outset of the hearing he hoped to reach consensus on "a small, bipartisan, stabilization bill" by the end of next week. But the five state officials who testified seemed to have ideas other than those Alexander has touted for the past couple of weeks.

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Alexander has been floating the notion of guaranteeing insurance companies that they would be reimbursed for at least one more year for the "cost-sharing reduction" discounts they provide to enrollees with incomes under 250 percent of the federal poverty level. Insurers must make those payments under the Affordable Care Act, but the Trump administration has threatened to withhold the money owed insurers.

Commissioners said insurers in their states plan sharp rate hikes next year unless Congress removes that uncertainty by appropriating money to pay the discounts, estimated at $10 billion in 2018.

In exchange for guaranteeing the cost-sharing payments, which Democrats have sought, Alexander suggested Democrats would need to give states more flexibility to seek waivers from the rules of the federal health law to experiment with different ways to provide health insurance coverage. "Democrats will have to agree to something they may be reluctant to support," he said. "That is called a compromise."

But the state insurance officials — Democrats and Republicans from Tennessee, Alaska, Washington, Oklahoma and Pennsylvania — agreed that the guarantee for funding cost-sharing payments needs to go for more than a year.

"Insurers right now are already planning for 2019," said Washington Insurance Commissioner Mike Kreidler, a former Democratic member of Congress. "In order to give them predictability, you would have to give them more certainty in the market" than a one-year extension.

Added Alaska Insurance Commissioner Lori Wing-Heier, "Insurers have to have more than a one-year commitment" to persuade them to stay in the market and not raise premiums high enough to make up for the potentially lost payments from the federal government.

Alexander also pushed his idea to make it easier for states to use the federal health law waivers to create their own "reinsurance" programs that would keep premiums down by paying for the most expensive patients. But the insurance officials suggested they would rather have Congress reinstate a federal reinsurance program that expired this year.

Wing-Heier, whose state is so far the only one to have its own reinsurance plan approved by the federal government, noted that Alaska funded its own program for the first year, "and the states I've talked to said they can't afford to do that."

"Allowing states to do that is great, but if we could have a federal backstop in the meantime and to help with 2018, I think that's going to be important," said Pennsylvania acting Human Services Secretary Teresa Miller. She was formerly the state's insurance commissioner.

A federal reinsurance program, said Tennessee Insurance Commissioner Julie Mix McPeak, "would help states that don't have the wherewithal to get their own programs up and running."

States, agreed Miller, "are not going to be able to fix this completely on our own."

The state officials concurred that the current process for seeking a federal waiver is too cumbersome and could definitely use streamlining.

"The part that is stifling states is the six-month waiting period before they receive final approval," Wing-Heier said. "… [Federal officials were] very helpful to us, but it still was a very lengthy process."

State officials also expressed concerns about the Trump administration's cutbacks in programs this fall to help people sign up for coverage starting in 2018 and to promote the open enrollment period from Nov. 1 to Dec. 15, which is 45 days shorter than last year's.

"I worry that these decisions will result in fewer people enrolling and relatively fewer healthy people enrolling, exacerbating the issues that already exist in the risk pool," Miller said.

Some senators also suggested ideas that have not been on the table.

For example, Sen. Lisa Murkowski (R-Alaska) asked whether individuals in places with few or no insurers might instead be allowed to purchase coverage through the federal employee health plan.

The committee has three more hearings scheduled on the health issue this week and next. On Thursday, senators will hear from a bipartisan panel of governors on what they think would best stabilize the individual insurance market and better control health care costs over the long term. One major concern is rising drug prices — a point that insurance commissioners made Wednesday and which some governors will reinforce, according to their prepared testimony.