It was a positive start to what the U.S. Senate Committee on Health, Education, Labor and Pensions hopes will be the start of a successful bipartisan effort to draft legislation that will modify the Affordable Care Act (ACA) to stabilize government health exchanges for the 18 million Americans who purchase individual health insurance plans and providing certainty that subsidy payments to insurance companies that offer health insurance plans on the exchanges will continue.
State insurance commissioners from Alaska, Pennsylvania, Tennessee, and Washington all said that Congress should continue subsidy payments to insurance companies that offer health insurance plans on the exchanges to cover cost sharing reductions (CSRs) that lower the amount that eligible consumers pay for deductibles, copays and coinsurance. They urged the committee to move quickly and meet its planned deadline of having legislation in place by the end of September to help stave off significant premium increases to be imposed by nervous insurers who may otherwise suffer the risk of substantial losses from providing coverage to disproportionate numbers of high-risk individuals.
“The CSR funding issue is the single most critical issue that you can address to help states stabilize insurance for 2018 and potentially bring costs down,” said Julie Mix McPeak, Commissioner, Tennessee Department of Commerce and Insurance.
She said that over the past four years, Tennessee residents had seen insurance choices drop and premiums “skyrocket” in the individual insurance market. “There is still potentially time for the Congress and Administration to provide stability to health insurance markets across the country by agreeing to fund CSR payments at least through the 2018 Plan Year,” she said in her testimony. “Such a stability measure could result in an immediate reduction in proposed premium rates for 2018.”
Teresa Miller, Pennsylvania Acting Secretary of the Department of Human Services and Former Pennsylvania Insurance Commissioner said insurers had indicated to her that the loss of CSR payments or the decision not to enforce the individual mandate to require Americans to have health insurance would result in steep premium increases in her state.
“If cost-sharing reductions are not paid, they estimated that they would need to request a statewide average increase of 20.3 percent,” she said. “If the individual mandate is not enforced, they said they would seek an estimated 23.3 percent increase. If both changes occur, our insurers estimated that they would seek an estimated increase of 36.3 percent, assuming they continue to participate in the market at all. I’d be lying if I said these numbers didn’t worry me, especially as we prepare to finalize rates.”
Washington State Insurance Commissioner Mike Kriedler said that approximately 330,000 Washington state residents, about 5% of the state population, purchase individual health insurance coverage. He said insurers in the state have proposed rate increases averaging 23 percent while the number of proposed health plans offered have dropped substantially. “This year, our progress forward is threatened by uncertainty around the fate of the ACA, including continued payment of cost-sharing reductions, weakened enforcement of the individual mandate, and federal investment in outreach and marketing to promote enrollment in health coverage,” he said.
Kreidler urged the committee to make the CSR payments a permanent appropriation. “Cost-sharing reductions are not insurance company bail-outs; they benefit lower-income people and families by directly reducing their health care costs,” he said. “For those who struggle to meet basic needs such as food and housing, cost sharing reduction payments will make a difference in whether they decide to purchase insurance.”
Lori Wing-Heier, Director of the Division of Insurance for the State of Alaska Department of Commerce, Community and Economic Development, indicated that the situation in her state was becoming dire.
“We are down to days to address the number of insurers, the cost, and the subsidies for 2018,” she told testified before the committee. “Even under such extreme time constraints, as you consider congressional action to stabilize premiums to help people in the individual insurance markets, please make your decisions in a bipartisan manner after thorough analysis. Any decision that you make, large or small, will affect access to health care insurance, an extremely important and deeply personal subject to all Americans.”
Oklahoma Insurance Commissioner John Doak said his state is facing the collapse of its individual health insurance market. He took a different tact than the other state officials testifying, urging the committee to repeal all fees and taxes that increase the price of health insurance, including the Patient-Centered Outcomes Research Institute (PCORI) fees, the Health Insurance Tax (HIT), and Federally-facilitated Marketplace (FFM) user fees. He also urged repeal of the individual and employer mandates and replacing them with a meaningful continuous coverage premium discount or a surcharge and waiting period for interrupted coverage.
“We are down to only one carrier on our FFM and we have seen a rise in premiums of 130 percent over the last four years” said Doak. “While many in my state are taking steps within the existing regulatory framework to hopefully stop some of the damage the ACA has caused, we still need help in the form of regulatory rollback and clarity to establish a more solid long term footing.”
Senator Lamar Alexander (R-Tennessee), committee chair, noted in his opening remarks, that interest among Senators in the committee’s hearings was high, noting that 31 Senators accepted an invitation to attend a pre-hearing coffee to meet with the testifying state insurance officials. “That’s a remarkable level of interest,” he said.
Hearings continue today with testimony from Governors Charlie Baker (R-Mass.), Steve Bullock (D-Mont.), Bill Haslam (R-Tenn.), Gary Herbert (R-Utah) and John Hickenlooper (D-Colo.)
You can watch video of the committee hearings, as well as download the testimony of the state officials who offered testimony at this link.
