Senate Leaders Draft Bill to Stabilize Individual Insurance Market

October 2017 ~

Senators Lamar Alexander and Patty Murray have announced their agreement on a short-term deal to offer bipartisan legislation to stabilize individual market premiums for the 2018 and 2019 plan years and provide meaningful State flexibility.

The draft legislation appropriates roughly $25-30 billion in cost-sharing reduction payments to insurers, which offset their costs for providing discounts on deductibles and co-payments to certain low-income individuals enrolled on insurance exchanges. Other items of note in the draft text of the bill include:

  • Revised waiver language which would require states to “provide coverage and cost sharing protections against excessive out-of-pocket spending that are of comparable affordability, including for low-income people, people with serious health needs, and other vulnerable populations.”
  • Extension of the waivers’ duration, from five years to six, with unlimited renewals possible;
  • Prohibit Department of Health and Human Services (HHS) from terminating waivers during their duration (including any renewal periods), unless “the state materially failed to comply with the terms and conditions of the waiver”;
  • Requirements for HHS to release guidance to states within 30 days of enactment regarding waivers, including model language for waivers;
  • Adjustments to shorten the time for the HHS to consider waivers from 180 days to 90;
  • Language to allow a 45-day review for 1) waivers currently pending; 2) waivers for areas “the Secretary determines are at risk for excessive premium increases or having no health plans offered in the applicable health insurance market for the current or following plan year; and 3) waivers that are “the same or substantially similar” to waivers previously approved for another state. These waivers would initially apply for no more than three years, with an extension possible for a full six-year term;
  • Language to allow governors to apply for waivers based on their certification of authority, rather than requiring states to pass a law authorizing state actions under the waiver.
  • Mandates for state insurance to submit a certification to the HHS that the state will make sure plans receiving cost sharing reduction subsidies in 2018 pass those benefits on to enrollees or the federal government, and an accompanying plan for doing so.
  • Adjustments to the “pass-through” language allowing states to receive their exchange funding via a block grant.
  • Language to allow all individuals to purchase “catastrophic” health plans, and keep those plans in a single risk pool with other ACA plans.

Senator Alexander says by lowering the costs of premiums and increasing state flexibility, the legislation will enable more consumers access to health insurance, “Our legislation is based on the four bipartisan hearings and other meetings that our committee held last month and engaged nearly 60 senators. According to witnesses at our hearings and according to the Congressional Budget Office, without these cost-sharing reduction payments, premiums will rise, the debt will increase by $194 billion over ten years, and up to 16 million Americans may find themselves living in counties where no company sells insurance in the individual market.”

Alexander continued, “Witnesses also testified that one way to lower costs for consumers is to give states more flexibility than the Affordable Care Act now allows to design health insurance plans give consumers more choices. We have purposely limited our proposal to these two things — first, two years of temporary cost-sharing payments, and, second, amendments that would give states meaningful flexibility in using section 1332 innovation waiver that is already a part of the Affordable Care Act.”

“Only about six percent of Americans get their insurance in the individual market. It’s about 18 million people, but every single one of them finds their health insurance important, and every single one of them is terrified by the skyrocketing premiums and possibility that they may not able to buy insurance at all if we don’t act. The best course is to take this limited bipartisan first step that to avoid the chaos that could occur during 2018 and 2019 if premiums continue to skyrocket and millions of Americans find themselves without a way to purchase health insurance.”

As it stands now, the draft legislation has garnered the support of 60+ senators and 12 GOP leaders, yet there has been no indication that there will be a vote on bill and it is unclear at this time whether or not the draft will move forward to the Senate floor.



Source(s): Modern Healthcare; Axios; HealthAffairs; InsuranceNewsNet; Politico;