Last week, Senate Health, Education, Labor, and Pensions Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) announced they had reached an agreement on a short-term, bipartisan health insurance market stabilization bill. The Alexander-Murray bill would provide cost-sharing reduction (CSR) payments to insurers through 2019 as well as expanded State flexibility on Affordable Care Act (ACA) Section 1332 waivers. Counting Senators Alexander and Murray, the bill has the support of 12 Republicans and 12 Democrats (including Independents who caucus with Democrats).
While President Trump initially appeared supportive of the effort, he later tweeted that “I am supportive of Lamar as a person & also of the process, but I can never support bailing out ins co's who have made a fortune w/ O’Care.” A spokesman for House Speaker Paul Ryan (R-WI) responded to the Alexander- Murray bill: “The speaker does not see anything that changes his view that the Senate should keep its focus on repeal and replace of Obamacare.”
Over the past weekend and with open enrollment starting on November 1, there was some public negotiating over a short-term stabilization package. A White House spokesman outlined a set of principles that any short-term relief bill must contain, including exemptions from the individual mandate penalty for 2017 and from the employer mandate penalty for 2015-2017, as well as an expansion of health savings accounts. Senate Majority Leader Mitch McConnell (R-KY) indicated that he would bring the bill to the floor if he knew that President Trump would sign it. Senate Minority Leader Charles Schumer (D-NY) reported that the bill has 60 votes to pass the Senate, as all 48 Senate Democrats plus 12 Senate Republicans are willing to support it.
The main component of the Alexander-Murray bill is the appropriation of CSR payments to insurers to assist low-income enrollees with out-of-pocket costs for 2017, 2018, and 2019. The bill also contains a provision to ensure insurers do not “double-dip” by receiving CSR payments and maintaining rate increases they had filed assuming CSR payments would be terminated.
The legal dispute over CSR payments has centered around whether these CSR payments were officially appropriated by the Congress, not whether insurers are obligated, under the ACA, to provide subsidies. When the White House announced on October 12 that the Trump Administration would no longer make CSR payments, it did not remove insurers’ obligations but instead eliminated Federal reimbursement for doing so, resulting in concerns that insurers would pass along the additional costs to consumers in the form of higher premiums. As the Congressional Budget Office (CBO) found in an August analysis of the impact of ending CSR payments, effective January 1, 2018, insurance premiums for “silver” plans would increase 20 percent in 2018. Today, a judge in the U.S. District Court for the Northern District of California is expected to hear arguments from 19 Democratic State Attorneys General to force the Trump Administration to continue making CSR payments while the case is litigated.
In addition to providing stable CSR funding, the Alexander-Murray bill would allow greater flexibility in the Section 1332 State Innovation Waiver process. Specifically, the bill allows for greater flexibility in cost-sharing and health plan design while maintaining protections for vulnerable and low-income individuals, as well as for those with serious health conditions. States could reallocate a portion of premium tax credits to cost-sharing reductions, small business tax credits, reinsurance, or invisible high-risk pools. State waiver proposals would be judged over the entire term of a waiver instead of having to be budget neutral in the first year or in every year; State proposals would be required to have “comparable affordability” instead of having to be “at least as affordable” as ACA coverage. Under the Alexander-Murray approach, individual governors could use existing executive authority to apply for a waiver, without needing additional State legislation. The waiver process would be streamlined, and new fast-track procedures established for urgent situations such as the risk of “bare counties” or if waivers are substantially similar to waivers already granted for another State.
The bill requires HHS to fund consumer outreach and enrollment activities, with the money coming from health insurer user fee funds. HHS would be required to report on outreach, education, and assistance activities.
The Alexander-Murray bill would also allow any individual to purchase a “copper plan,” currently available to those under 30 or those who qualify for an economic hardship waiver. Copper plans would be sold in the same risk pool as other plans.
The bill also directs CMS to issue regulations implementing the Health Care Choice Compacts established under Section 1333 of the ACA. This provision would allow States to enter into agreements where one or more insurance plans may be offered in such States, subject to the laws of the State in which the plan was written.
Senate co-sponsors of the bill are: Mike Rounds (R-SD), Lindsey Graham (R-SC), John McCain (R-AZ), Bill Cassidy (R-LA), Susan Collins (R-ME), Joni Ernst (R-IA), Lisa Murkowski (R-AK), Charles Grassley (R-IA), Johnny Isakson (R-GA), Richard Burr (R-NC), and Bob Corker (R-TN), as well as Senators Angus King (I-ME), Jeanne Shaheen (D-NH), Joe Donnelly (D-IN), Amy Klobuchar (D-MN), Heidi Heitkamp (D-ND), Al Franken (D-MN), Joe Manchin (D-WV), Tom Carper (D-DE), Tammy Baldwin (D-WI), Claire McCaskill (D-MO), and Maggie Hassan (D-NH)
A copy of the draft Alexander-Murray bill can be found here. A section-by-section of the bill can be found here.
