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September 8, 2017

How 5 governors want Congress to fix the exchange market

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A bipartisan group of state insurance officials and governors during separate Senate Health, Education, Labor and Pensions (HELP) Committee hearings this week detailed proposals that they said could improve the individual health insurance market.

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The hearings—convened by Senate HELP Committee Chair Lamar Alexander (R-Tenn.) and Sen. Patty Murray (D-Wash.), the committee's top Democrat—were the first two in a series of four scheduled hearings aimed at reaching a deal on a bipartisan bill to bolster the Affordable Care Act's (ACA) exchange market.

The hearings will continue next week with health care experts testifying Tuesday and a mixed panel of providers and patient advocates testifying Thursday.

Alexander during Wednesday's hearing with state insurance officials and Thursday's hearing with governors said he plans to reach a consensus on a "small, limited bipartisan step on health insurance" by the end of next week. Alexander said that would give Congress time to take up the bill by the end of this month, when insurers will need to make their final decisions on selling exchange plans for the 2018 coverage year.

Details of the hearings

During the hearings, lawmakers heard testimony from five state insurance officials and five governors on how individual health insurance markets in their states are faring and how to improve them.

Lawmakers on Wednesday hear testimony from:

  • Alaska Division of Insurance Director Lori Wing-Heier;
  • Oklahoma insurance commissioner John Doak (R);
  • Pennsylvania insurance commissioner Teresa Miller (D);
  • Tennessee insurance commissioner Julie McPeak (R); and
  • Washington insurance commissioner Mike Kreidler (D).

Lawmakers on Thursday heard testimony from:

  • Colorado Gov. John Hickenlooper (D), who along with Ohio Gov. John Kasich (R) last week shared a set of health reform proposals;
  • Massachusetts Gov. Charlie Baker (R);
  • Montana Gov. Steve Bullock (D);
  • Tennessee Gov. Bill Haslam (R); and
  • Utah Gov. Gary Herbert (R).

Finding common ground

During the hearings, both insurance officials and governors expressed support for:

  • Creating a temporary federal reinsurance program to help offset insurers' costs for covering sicker enrollees;
  • Giving states more flexibility to change their individual insurance markets through waivers; and
  • Guaranteeing the Affordable Care Act's cost-sharing reduction (CSR) payments for at least one year.

Governors also said Congress should encourage more young, healthy adults to enroll in and maintain continuous coverage, such as by keeping and enforcing the ACA's individual mandate and creating special plans for individuals who allow their coverage to lapse.

Still, the governors and insurance officials offered varying plans for implementing these ideas. For instance, Herbert and Haslam suggested Congress should modify waiver requirements to allow states to define the essential health benefits, set age bands, and provide alternative incentives for continuous coverage, while Hickenlooper and state insurance officials called for changes that would accelerate the waiver process and provide more flexibility for determining budget neutrality.

The governors also indicated they would need federal support to get a reinsurance program up and running. Haslam said, "For the first year, you're going to have to have the federal government help on that."

However, Alexander said it was unlikely that he could pass a bill with enough funding to create even a temporary federal reinsurance program. "To get a Republican president, House and Senate to vote for just more money isn't going to happen in the next two or three weeks," Alexander said, adding, "Whether it's reinsurance or an invisible high-risk pool or a stabilization fund—we need to think about what the state share of that should be."

Sen. Chris Murphy (D-Conn.) also said it was unlikely that a federal reinsurance program would be ready for the 2018 coverage year.

What could be in a short-term bill

Alexander in his opening comments provided more detail on what he believes could be included in a final bill. He expressed support for funding the ACA's cost-sharing reduction payments, expanding eligibility for high-deductible "copper plans," as well as making some procedural changes to the ACA's so-called innovation waivers:

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  • Allowing savings from both Medicaid waivers and ACA innovation waivers to determine whether a state's proposals are budget neutral;
  • Allowing states to file "copycat" applications based on changes HHS has approved for other states;
  • Providing states with planning funds;
  • Removing the requirement for state legislative approval of a waiver request and instead accepting a letter from the governor; and
  • Shortening the approval period.

Next steps

While the Senate HELP committee hearings will continue next week, it's not clear whether there is enough time and support to pass a short-term bill before the end of the month, when insurers must sign final contracts to sell exchange plans for the 2018 coverage year, Politico's "Pulse" reports.

Further, CQ HealthBeat reports, senators at the moment have no clear legislative vehicle for advancing a stabilization bill. Senate Majority Whip John Cornyn (R-Texas) suggested the possibility of adding ACA reforms to the upcoming reauthorization of the Children’s Health Insurance Program (Shaw, FierceHealthcare, 9/7; Reid, Morning Consult, 9/7; Rovner/Bluth, Kaiser Health News, 9/7; Owens, Axios, 9/7; Diamond, "Pulse," Politico Pro, 9/8; Jost, Health Affairs Blog, 9/7; Firth, MedPage Today, 9/7; McIntire, CQ HealthBeat, 9/7 [subscription required]; Pear, New York Times, 9/7; Eilperin/Goldstein, Washington Post, 9/7).

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