Report recommends CSR funding, resinsurance programs to stabilize ACA exchange market
- A new report from the Urban Institute states the federal government could stabilize the Affordable Care Act (ACA) exchange market by committing to cost-sharing reduction (CSR) payments, permanently reinstating the reinsurance program, enforcing the individual mandate and increasing enrollment assistance.
- For a more long-term solution, the report recommends slowing the market to reduce consumer premium and out-of-pocket costs as well as payer risk.
- Recent actions from HHS are not in line with the playbook Urban Institute rolled out. The agency has taken several actions likely to reduce open enrollment numbers, including funding cuts to ACA promotion efforts and several scheduled downtimes for the enrollment website. Also, the White House has refused to say whether it will continue the CSRs.
Among the few health care proposals in Congress that have bipartisan support are devoted funding for CSR payments and reinsurance programs. There had been talk of legislation to accomplish this, but it was sidelined by the Graham-Cassidy ACA repeal bill. With that repeal effort now out of consideration, a few lawmakers have again started talking about a stabilization bill. No text or outline has been released, though.
The benefits of shoring up the individual market are more payer participation (which leads to competitive pricing), and reduced premiums and out-of-pocket costs. A recent report from Avalere (that was funded by America's Health Insurance Plans) found premiums could drop by 17% if the CSRs are paid and a $15 billion reinsurance stabilization package is created.
But the HHS under President Donald Trump has actively criticized the ACA and said it is unfixable. Trump has floated the idea of letting the individual market “implode” to force ACA proponents to negotiate with those who want repeal. HHS on Wednesday made no effort to appear impartial when it gave a statement to Buzzfeed News that said ACA enrollment has "never lived up to" expectations. "The American people know a bad deal when they see one and many won’t be convinced to sign up for ‘Washington-knows-best’ health coverage that they can’t afford," the statement read.
This week, the agency told its regional directors not to participate in state-based events promoting open enrollment. HHS has also cut the budgets of community groups that help people enroll by as much as 95% and cut the overall advertising budget for the ACA by 90%. HHS announced last week the Healthcare.gov website will go dark for 12 hours on all but one of the Sundays in the enrollment period. It said this was necessary for maintenance, but former HHS officials said that amount of downtime was far more than should be needed to keep the site functioning properly.
The Urban Institute report notes the individual market has many challenges, largely because of the diverse group of enrollees. "Some covered in this market are healthy young adults, but others have serious chronic illnesses," according to the report. The institute said a bigger risk pool could be created by offering consumers more financial assistance. It suggests capping premiums at lower percentages of income, extending assistance to higher levels of income and tying the credits to premiums of gold plans instead of silver plans.
- Urban Institute Stabilizing and Strengthening ACA Nongroup Markets
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