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Unstable Insurance Markets Take Focus at Senate

Upheaval in individual insurance markets requires bipartisan action in the next week, the chair of the Senate health committee said Wednesday.

WASHINGTON (CN) - Upheaval in individual insurance markets requires bipartisan action in the next week, the chair of the Senate health committee said Wednesday.

Noting the upcoming deadline for insurers to file their 2018 individual exchange rates with the Department of Health and Human Services — part of the decision whether to participate in the individual markets next year — Sen. Lamar Alexander, R-Tenn., said his committee has a small window to act.

Once the Sept. 20 deadline passes, Congress won't be able to take any action that could affect insurance premiums in 2018, or the availability of insurance in some areas.

Wednesday’s hearing marked the first of four for the Senate HELP Committee — short for Health, Education, Labor and Pensions — which Chairman Alexander scheduled for the next two weeks with ranking member Sen. Patty Murray, D-Wash.

"The purpose of these hearings is to provide a focus and create an environment for reaching a consensus that we can act on quickly," Alexander said.

"My goal is to get a result on a small, bipartisan and balanced stabilization bill," he added.

Representing Tennessee, Oklahoma, Alaska, Washington and Pennsylvania, five state insurance commissioners testified at the hearing Wednesday about what Congress can do to stabilize the individual insurance markets created under the Patient Protection and Affordable Care Act.

Uncertainty has already caused some insurers to flee the market, but all five agreed that Congress could reduce some of the anxiety, and head off sharp premium hikes next year, if it funds cost-sharing reduction payments through 2018 - if not beyond - as well as reinsurance programs.

The cost-sharing subsidies compensate insurers for offering discounted plans to lower-income Americans, reducing their out-of-pocket cost of deductibles, co-payments and coinsurance.

Without a guarantee of those payments, some insurers are deciding to leave the markets.

Although the Trump administration has made the payments on a monthly basis, it has repeatedly threatened to cut them off. Some Democratic senators on the committee called these threats evidence of the president’s deliberate efforts to undermine the insurance markets.

Health-policy advocates at the nonpartisan group Families USA predict that loss of the payments will trigger a 19 percent surge in premiums for the 6 million Americans who purchase their insurance on the exchanges.

Teresa Miller, the insurance commissioner of Pennsylvania, testified Wednesday that the individual market in her state is improving, not collapsing as the Trump administration has repeatedly suggested.

Though she conceded that the federal health care law is imperfect, Miller said "the narrative that the ACA is failing and imploding is just false.”

Families USA data supports this, reporting market improvement and stability earlier in the year. Another nonpartisan group, the Kaiser Family Foundation, likewise reported in July that insurer profits are up this year in the individual markets.

Miller cautioned the committee meanwhile that this stability is fragile, and that uncertainty about the cost-sharing reduction payments is not helping.

If the payments end and premiums rise, Miller said the worst hit in her state will be the 125,000 people on the individual market who buy nonsubsidized plans.

Congressional funding of the cost-sharing reductions through 2019 will give insurers more predictability, Miller said. She also encouraged the committee to think about ways to increase and ensure enrollment, which broadens the risk pool and keeps costs down.

Here, too, Miller pointed at actions the Trump administration has taken to undermine the ACA, including shortening the enrollment period and reducing funding for advertising and enrollment assistance.

Families USA calls such funding critical to the health of the risk pool.

"This funding, which was cut last week by the Trump administration, helps consumers - particularly young and healthy people who will help balance the risk pool - learn about and enroll into available coverage," the group said in a statement.

Oklahoma insurance commissioner John Doak said he is not persuaded by the effectiveness of outreach efforts.

Calling the ACA a failure in Oklahoma, he said only markets can fix American health care. Doak agreed nevertheless that Congress should continue funding the cost-sharing reduction payments under the ACA framework. He also encouraged the committee to give states more flexibility, particularly through 1332 state innovation waivers, which get their name from a section of the Affordable Care Act.

These waivers allow states to modify how they implement key portions of the ACA as long as they don't cost the federal government more money. The program does not allow states to charge higher premiums or waive coverage for people with pre-existing conditions.

Only Hawaii and Alaska have obtained 1332 waivers, although seven other states have applied. Alaska has used its waiver to fund a reinsurance program that lowers premiums in the state.

Because of its small market and a high-cost risk pool, Alaska had seen premiums spiked by 203 percent since 2013, Alaska insurance commissioner Lori Wing-Heier testified. She said the reinsurance program brought stability.

The ACA had a federal reinsurance program from 2014-16 that was intended to give funds to individual markets, like that of Alaska, with higher-cost enrollees. The reinsurance program made insurers less inclined to charge higher premiums for higher-risk pools.

All five of the commissioners who testified at the hearing Wednesday suggested that Congress extend that program.

Five state governors are expected to testify at the committee’s next hearing Thursday. Hearings next week are expected to include experts on state flexibility and other stakeholders.

Categories / Government, Health

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