Eight major healthcare organizations, including the American Hospital Association and American Medical Association, are asking Congress to fund cost-sharing reduction (CSR) payments through 2019 to stabilize the individual health insurance market.
The groups sent a letter to the leaders of the Senate Committee on Health, Education, Labor, and Pensions (HELP) in support of CSR payments. Meanwhile, governors and state insurance officials appeared on Capitol Hill last week to also ask Congress to help stabilize the market.
In other Affordable Care Act (ACA) exchange news, Optima Health said it is pulling out of the exchanges in Virginia next year, which will leave 63 counties without an ACA plan option in 2018.
Payers and ACA supporters view CSR payments as critical to stabilizing the ACA market. Without those payments, insurance companies will flee the individual insurance market or ask for large premium increases. Already, the average individual insurance premiums are expected to increase by about 20% next year. Without those subsidies, the Congressional Budget Office predicted ACA premiums would skyrocket another 20%.
The last thing payers and hospitals want is an unstable market that could potentially throw millions off insurance, or make plans so expensive that people can’t afford them. The percentage of uninsured in the U.S. is now under 9% with 20.5 million fewer uninsured Americans than in 2010. An unstable individual market would quickly get the percentage back into double digits and lead to more uncompensated care and bad debt for hospitals.
President Donald Trump has paid the CSRs each month since taking office, but has also threatened to stop the payments and let the ACA market implode. Trump’s threats have created an uneasy ACA marketplace and left insurance companies worried of suffering huge losses if the CSR payments end.
A group of heavy hitters added to the chorus of those concerned about the president’s threats against CSRs and what they’re doing to the ACA market. The organizations that wrote the Senate HELP Committee were: American Hospital Association, American Medical Association, Federation of American Hospitals, America’s Health Insurance Plans, American Academy of Family Physicians, American Benefits Council, Blue Cross Blue Shield Association and U.S. Chamber of Commerce.
They asked for a funding commitment of at least two years, writing "it would go a long way to bring much needed stability to the individual market and promote access to more affordable coverage and choices for millions of Americans.”
The letter said eliminating CSR payments would increase premiums for benchmark silver plans by 20% in 2018 and 25% in 2020 as well as increase the federal budget deficit by $194 billion over the next 10 years. It would also lead to fewer plan choices for consumers and would increase the risk of more payers dropping out of the exchanges entirely, potentially leaving Americans with no ACA plan option.
That's what happened to Virginians last week when Optima Health announced it was pulling out in that state and leaving about 70,000 without an ACA option. The move comes a few days after Anthem said it would scale back its participation in marketplaces in Missouri and Kentucky and about two weeks after CareSource agreed to cover the final county in Ohio without an ACA plan option in 2018. Only last month, healthcare and state officials fretted about dozens of potential counties without an ACA plan option in 2018, including nearly all of Nevada counties. However, state insurance commissioners worked to fill in all the bare counties until Optima Health’s announcement last week.
The healthcare industry groups certainly aren't alone in their request for assurance of CSR funding. Governors and state insurance commissioners from both parties spoke before the Senate HELP Committee last week asking to stabilize the ACA by agreeing to keep CSR payments.
Pennsylvania Insurance Commissioner Teresa Miller said insurance companies may seek 36% premium increases in her state without the CSRs and enforcement of the individual mandate, which requires nearly all Americans to have health insurance. The HELP committee plans on two more days of hearings about stabilizing premiums and the individual market this week.
In addition to the HELP committee’s work, a bipartisan effort of eight governors spearheaded by Ohio Gov. John Kasich, a Republican, and Colorado Gov. John Hickenlooper, a Democrat, has its own healthcare plan that includes quick fixes and long-range plans. The Kasich-Hickenlooper plan would make immediate CSR payments, stabilize risk pools with a reinsurance program or a similar program, encourage more consumer participation in ACA marketplaces and streamline waivers that allow states to avoid some ACA provisions.
The plan is generally bipartisan, but could be held up by hardliners in either party. Also, Congress is busy with disaster relief efforts, tax policy changes and the debt ceiling. The GOP is still bruised from its failed efforts to repeal the ACA, and may be wary to take on more healthcare legislation. Regardless, the healthcare industry will continue calling for action on the CSRs from either the White House or Capitol Hill.