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Stabilize the ACA individual market, lawmakers told at hearing

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Stabilize the ACA individual market, lawmakers told at hearing

A Republican committee leader warned that millions of Americans could be left without healthcare insurance if Congress fails to take action within the next two months to stabilize the Affordable Care Act's individual marketplace.

"One insurance commissioner told me that if we didn't act by April of this year, there wouldn't be insurance sold in his state next year," said Sen. Lamar Alexander, R-Tenn., chairman of the Senate Health, Education, Labor and Pensions Committee.

The individual market, which makes up only 6% of insured Americans, is small in comparison to the employer market, which is 61% of insured Americans. Medicare, the U.S. government's program for the elderly and disabled, and Medicaid, the program for the poor, cover the rest.

Still, the individual market consists of 18 million Americans who "may have zero choices for insurance next year" if companies keep exiting, Alexander said at his committee's Feb. 1 hearing.

In a Jan. 31 conference call, Aetna CEO Mark Bertolini said that because of the "unclear nature" of where things are headed with the ACA, his firm has decided to bail out of the individual market for 2018, although the company may continue to sell plans in a handful of states.

Anthem Inc. also signaled during its Feb. 1 quarterly earnings call that it may abandon the ACA individual marketplace for 2018.

The U.S. may reach a situation next year where many Americans have the tax credit subsidy through the ACA to pay for their insurance premiums in the individual market, but no insurance plans available to buy, Alexander said.

"It'd be like having a bus ticket in a town where no buses run," he said.

Strong signals of certainty from Congress could help stabilize the individual market, "avoiding even higher costs and fewer choices," said Marilyn Tavenner, president and CEO of America's Health Insurance Plans, a Washington-based trade group representing insurers.

Ensuring the ACA's advanced premium tax credits and cost-sharing reduction payments continue — no matter what lawmakers eventually come up with for an ACA replacement plan — will be critical for preventing further deterioration of the "already unstable" individual market, said Tavenner, who served as the administrator for the Centers for Medicare and Medicaid Services from 2011 to 2015 before going to the lobbying group.

She also urged lawmakers to continue the ACA's so-called reinsurance, which provides payments to healthcare plans that enroll higher-cost individuals.

Reinsurance is intended to protect against premium increases in the individual market by offsetting the expenses of high-cost individuals.

The ACA established the reinsurance payment as a temporary three-year measure, running from 2014 through 2016.

But the sunset of the reinsurance program, along with the underlying growth in medical and prescription drug costs, has helped drive the increase in premiums, Tavenner said.

The current uncertainty has caused confusion for insurers, she said.

"We need predictability, and predictability for long periods of time," Tavenner said.

Former Kentucky Gov. Steve Beshear, a Democrat who served from 2007 to 2015, urged lawmakers at the hearing to reform, rather than repeal and replace, the ACA.

"The ACA has helped states create healthier workforces, improve their economic competitiveness, stabilize rural hospitals, and improve the health of their populations," Beshear said.

He noted that because of the ACA, Kentucky experienced the largest drop in its uninsured rate of any state in the U.S. — falling from 20.4% to 7.5%.

Republicans have been struggling with how they will keep their pledge to deliver better healthcare at lower cost and follow through on President Donald Trump's promise of "insurance for everybody" after they repeal the ACA.

While many Republicans want an immediate ACA repeal, a growing number want to wait until the party has agreed on a replacement package.

Alexander said he is among the latter group of lawmakers.

Whatever Republicans finally agree on, they will own it, said Sen. Patty Murray, D-Wash., the ranking member on the HELP Committee.

While Republicans and Democrats are likely to keep fighting over the repeal and replacement of the ACA — a battle Alexander said the politicians have gotten so good at they could do it in their sleep — stabilizing the individual market could be the first step in coming together to work things out, "without arguing about the whole rest of the American healthcare system," the HELP committee chief said.