By Frank Klimko
If Senate Republican efforts to repeal the Affordable Care Act founder, lawmakers could still enact legislation that patches ACA problems while providing a more stable market for insurers leading up to this fall's open enrollment.
The Senate is to vote soon, as early as July 25, on either of two health care bills: one that would repeal-but-replace-later the ACA and a second comprehensive package, called the Better Care Reconciliation Act. Senate Majority Leader Mitch McConnell has said he intends to bring the repeal-only bill to the floor, although there are enough votes to block it.
If the votes fail, the path forward is unclear. President Donald Trump has admonished the Senate to stay in session, skipping the summer holiday, until a repeal measure is passed (Best's News Service, July 20, 2017).
However, U.S. Sen. Lamar Alexander, R-Tenn., chairman of a key Senate health care committee, announced if the repeal effort is wrecked, he plans to hold hearings on stabilizing the ACA's insurance marketplaces.
Despite the partisan divide over health care reform, Democrats and Republicans may find some areas worthy of collaboration, market observers said. Congress must move quickly; insurers are pricing their products for 2018 with the next open enrollment to launch on Nov. 1.
Topping the list is the cost-sharing reduction program. It is critical for market stability because it pays insurers for helping enrollees with medical expenses only after the services have been used. An abrupt funding cut-off, like Trump has threatened, could financially hamstring carriers and could result in a market exodus.
The administration recently made the July CSR payments, but there is no guarantee further payments will be forthcoming, said Ceci Connolly, president and chief executive officer of the Alliance of Community Health Plans.
"The CSR funding remains the most urgent to resolve," Connolly told Best's News Service. "Waiting by the mailbox on a month-to-month basis to see if the payment shows up is no way to run a business and have a stable market."
"I hope we don't lose sight on the urgency on the cost-sharing reductions," she said.
Congress could also support the markets through a reinsurance program, which would compensate carriers for enrolling high-risk, high-cost individuals, Connolly said. It could be based on what was proposed in the BCRA and offered to states on a state-wide or state-segmented basis. The BCRA would provide $50 billion in reinsurance funds directly to insurers over the next four years.
"Instead of one statewide risk pool, you could break it up into market areas and do risk adjustment on that basis," Connolly said.
Connolly was intrigued by a recommendation from Timothy Jost, emeritus professor, Washington and Lee University School of Law, who suggested Congress allow the Federal Employees Health Benefits Program to cover the counties that have no participating insurers in 2018. A new Centers for Medicare and Medicaid Services projected about 40 counties will have no coverage next year.
Connolly cautioned the FEHBP enrollees, who are federal employees, probably represent a vastly different risk pool than the individual market.
A new analysis from the Robert Wood Johnson Foundation said that, despite the drop in exchange participation, things are fairly stable. The market is not dead and current data suggest most counties will have at least two insurers offering plans on the exchange; most people will be able to choose from at least three, according to the analysis.
The individual market has changed significantly in the past few years. Insurance participation in the exchanges now largely excludes the national carriers, not that they played a large part previously. The exchanges are now dominated by Blue Cross Blue Shield affiliates and regional carriers, said Katherine Hempstead, senior adviser at the foundation.
State-based and regional carriers have a different perspective from a national insurer, Hempstead told Best's News Service.
"The nationals have more business opportunities and are not geographically fixed," she said.
"For example, a single-state Blue has to make it in the state," Hempstead said. "You will get a reputational hit if you don't."
Yost, in a blog posting, suggested Congress leave the individual mandate untouched. The mandate replacements are not credible, he said.
"The ACA's individual mandate penalty is too small, was phased in too slowly, and has not been adequately enforced, but for the time being it is all we have to encourage healthy people to enroll in coverage," Yost said. "Until someone comes up with a better solution, it should be left in place."
Merrill Matthews, Institute for Policy Innovation resident scholar, said he wasn't sure that things could be worked out.
"It isn't entirely clear to me that most Republicans want to stabilize the markets," Matthews told Best's News Service.
"Many don't want Trump to continue with the CSR payments, especially since they are considered unconstitutional by many Republicans," Matthews said.
"Probably the best way to stabilize them is for states to shift to an invisible high-risk pool, as Alaska and Maine have done," Matthews said. "But it isn't entirely clear how well that works for larger states with multiple carriers. And it isn't clear Republicans will provide any money for that."
(By Frank Klimko, Washington correspondent, BestWeek: Frank.Klimko@ambest.com)