By Frank Klimko
A U.S. Senate draft bill to replace the Affordable Care Act would address one of the insurance industry's gravest concerns by authorizing funding to pay for the cost-sharing reduction program for the next two years.
"We appreciate the Senate has funded the vitally important CSR subsidies through 2019 and is providing some amount of market certainty," said Ceci Connolly, president and chief executive officer of the Alliance of Community Health Plans.
The draft Senate measure, the Better Care Reconciliation Act, was released June 22 and would significantly alter the way health care is delivered.
"We remain troubled by the prospect of millions of people losing coverage under the Senate bill, particularly the working families who will be significantly impacted by the proposed changes to Medicaid," Connolly said in a statement.
Elizabeth Carpenter, senior vice president at Avalere Health, agreed that her analysis said the draft measure contains language to help improve the certainty in the health care markets.
"This legislation seeks to stabilize the market in the near term," Carpenter told Best's News Service. "But in the long term, it will likely lead to more people uninsured with most of those lives coming from the Medicaid program."
The CSR payments are considered critical to market stability and the draft bill would fund them through 2019. The U.S. Health and Human Services Department has made the June payment, but officials would not guarantee payments for the rest of the year (Best's News Service, June 21, 2017).
The payments are made directly to insurance carriers to pay for cost-sharing reduction subsidies. Larry Levitt, a health care analyst at the Kaiser Family Foundation, questioned whether a two-year CSR funding window extension was broad enough.
"The Senate bill funds cost-sharing subsidies through 2019," Levitt said on Twitter. "But then it eliminates them beginning in 2020, meaning higher deductibles."
No committee hearings are scheduled for the Senate bill and Republican Senate leaders hope to hold a vote quickly, said Senate Majority Leader Mitch McConnell, R-Ky.
"It's time to act because ObamaCare is a direct attack on the middle class and American families deserve better than its failing status quo," McConnell said. "They deserve better care."
The Senate bill would eliminate the individual mandate and repeal most of the ACA taxes, which are also contained in the bill that passed last month in the House: the American Health Care Act (HR 1628). It would also push back the implementation date of the Cadillac Tax to 2026.
But, the draft Senate bill also differs significantly from the House measure, which would cause about 23 million people to lose coverage over the next decade, according to a score from the Congressional Budget Office.
The Senate bill would drop the House's waivers allowing states to let insurers boost premiums on some people with pre-existing conditions. Under the AHCA, states would be able to apply for a waiver to allow medical underwriting of individuals who do not maintain continuous coverage, provided the state sets up a special support program.
States would not be able to waive the community rating mandate and the Senate measure would also retain the ACA's provision on guaranteed issue.
The combination of keeping the guaranteed issue and preventing medical underwriting would make the Senate version actuarially unsound, said Merrill Matthews, resident scholar at the Institute for Policy Innovation, an independent, nonprofit public policy research organization.
"I think what the heck is going on here is that some Republicans have grown comfortable with the insurance regulations in Obamacare," Matthews told Best's News Service, "and don't understand what is destroying the individual health care market."
The Senate bill would streamline the state ACA waiver process for states, allowing them to seek waivers on such things as the 10 essential health benefits (like maternity care) and actuarial value, or the requirement that plans cover a certain percentage of an enrollee's health care costs.
The pre-existing condition protections offered under the ACA could still be undermined by the state waiver process on essential health benefits, said Sen. Chuck Schumer, D-N.Y.
"It may not guarantee Americans the coverage they need by waiving essential health benefits," he said. "They may not have the coverage when they need it the most. The coverage for pre-existing conditions may become unaffordable or nonexistent in this bill."
"This is a bill designed to strip away health care benefits and protections from Americans who need it most in order to give a tax break to the folks who need it least," Schumer said.
It would largely retain the structure of the individual subsidies that help pay for coverage on the ACA exchanges, but at lower, unspecified levels. It would reduce eligibility to those in households making up to 350% of the federal poverty limit down from the current 400%.
The bill would create a pair of reinsurance or stabilization funds to support the markets. It would create a short-term stabilization fund, setting aside $15 billion per year for 2018 and 2019 and $10 billion per year in 2020 and 2021. The bill would also create a long-term state innovation fund that would distribute to the states $62 billion, over eight years, to increase insurance affordability. The $112 million in stability funding is slightly less than the $123 billion available in the House bill for such efforts.
Like the House measure, the Senate bill would phase out the federal funding for the ACA expansion of Medicaid, which has provided coverage for about 11 million people in 31 states. Under the Senate bill, funding will phase out over four years from 2020 to 2024.
Key parts of the draft bill could change as Republicans negotiate final details and try to come up with 50 votes they need to pass the bill. Senate leaders must also resolve questions about how much of the bill can be squeezed through the Senate's budget rules. It could be brought to the floor as soon as June 29.