A bill to stabilize Affordable Care Act markets, if it passes as-is, would provide certainty to insurers that a key subsidy to help pay for low-income consumers will be funded and would allow states to run their own health systems under an expedited review process.
The bill by Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., still in draft form, is designed to immediately bring stability and certainty to state exchanges that have seen insurers whittle down their offerings or exit completely.
The draft provides cost-sharing reduction payments to insurers through 2019, filling a void President Donald Trump created with his decision to pull them Oct. 12.
Cost-sharing reductions, or CSRs, are payments made to insurers by the government to help cover low-income or high-risk consumers. Without the subsidies, insurers bear the full brunt of healthcare costs.
Chris Sloan, senior manager at research firm Avalere Health, said in an interview that even if the measure is passed, for the rest of 2017, insurers are still going to "eat" the loss of CSRs.
But conceivably, Sloan said, states that have allowed two sets of rates could "flip back" to rates that insurers filed with the assumption that CSRs would be funded.
Earlier in the year, at least 14 states allowed insurers to double-file rates — one assuming CSRs would be funded, and another, unfunded.
"It is going to be an absolute mess trying to get everything together," Sloan said. "Every day you get closer to open enrollment is less time to reload rates or change things."
Open enrollment begins Nov. 1 and runs until Dec. 15.
According to health policy experts at the Kaiser Family Foundation, cost-sharing reductions are still available to eligible individuals in the marketplace with incomes at 100% to 250% above the federal poverty level. In addition, Kaiser experts said on a call with reporters Oct. 18, 57% of marketplace enrollees were eligible for CSRs in 2017.
Although Trump ended the subsidies to insurers, they are still required to offer plans to CSR-eligible individuals, according to remarks made during the call by Larry Levitt, co-executive director of the Kaiser Family Foundation's Program for the Study of Health Reform and Private Insurance.
"Given that we're two weeks away from open enrollment, even if cost-sharing reduction payments are restored, premiums are not going to change at this point," Levitt said. "They'll be locked in for 2018. However, the Alexander-Murray legislation at least required states to provide a rebate to consumers and the federal government if CSRs are restored and the higher premiums are still in place."
Levitt said the draft bill would route the payments back to the government because of increased subsidies. He said that most of the rebates in the bill would go back to the federal government rather than to consumers. But, he pointed out, this section of the bill is in brackets, which means it is up for negotiation.
The bill draft also provides an additional $105.8 million for "outreach and enrollment activities for each of the open enrollment periods for plan years 2018 and 2019."
The additional money is directed toward the Centers for Medicare and Medicaid Services, which announced in August that it would reduce funding for outreach services by 90%.
In addition, the draft expands the access to "copper" plans, or the typically low-premium, high-deductible plans purchased to cover catastrophic incidents. Under current law, consumers younger than 29 are eligible to purchase copper plans. The bill would allow anyone to purchase them.
The last portion of the bill also loosens the requirements under the law's Section 1332, which allows states to apply for a waiver from CMS to run their own health system independently of the ACA.
As written, the law requires state waivers to be formally introduced in statehouses, then go through the legislative process and get a sign-off from the governor and state insurance regulator before reaching CMS. Because some state capitols only meet every other year, and the legislative process takes months, only two waivers have been approved to date.
The draft bill expedites the review process at CMS by lowering the approval process to 45 days upon submission. The expedited review process applies to all waivers submitted before the law would take effect or after, retroactively applying to waivers submitted by states like Iowa.
In addition, the bill allows the public comment period required under the ACA to run concurrent to the approval process if a submitted application is "urgent" — as in, if a state is at risk for "excessive premium increases" or an area suddenly has no insurer participation. The concurrent public comment period provision also applies if a state's application is the same or very similar to another that has gained approval.
The draft bill sets the term limit for a waiver to be six total years unless a state requests a shorter duration.
But the bill also requires that the waiver not increase the federal deficit for the term of the waiver and over the 10-year budget plan.