Congress is on recess until September 5, and the outlook for Affordable Care Act (ACA) repeal and replace legislation remains unclear. Moderate Democrats and Republicans want to work together to shore up the ACA insurance markets. Conservative Republicans aim to deliver on a campaign promise and repeal the law. Senate leaders are eager to move on from health care to tax reform. While Congress is away from Washington, however, health insurers face a more pressing issue: whether the Trump Administration will continue to fund cost-sharing reduction payments (CSRs), which help insurers pay for coverage for low income individuals.
Health insurance plans need to finalize premium rates and sign final contracts for 2018 by the end of September. While State regulators have some flexibility, it is limited, as open enrollment begins November 1. Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) and Ranking Minority Member Patty Murray (D-WA) announced plans to hold hearings in the first week of September, to develop bipartisan legislation to “stabilize and strengthen” the individual health insurance market before insurers have to lock in 2018 rates. In the House, the bipartisan 40 member “Problem Solvers” caucus announced a plan last week to shore up the insurance market. They propose to fund the CSRs, modify the employer mandate, and scrap the medical device tax.
Reaching agreement on a path forward for health care reform over the next two months, which has been elusive for the past seven months, will be challenging. When Congress returns in September, it will face a crowded legislative schedule. Priorities include funding the Federal government, raising the debt ceiling, and reauthorizing the Children's Health Insurance Program (CHIP).
Even if Congress is able to reach an agreement on stabilization by the end of September, it may not be timely. President Trump has signaled that he may halt CSR payments, estimated to total $7 billion this year and which cover six million individuals. The next installment of CSR payments is due August 21. State insurance regulators are attempting to plan for 2018 with and without CSR payments.
CSR payments have been the subject of litigation over whether this reimbursement to insurers was an appropriation. The House of Representatives sued the Obama Administration in 2014, arguing that CSR payments were illegal, as Congress had not appropriated funding. The House did not drop the case after President Trump assumed office but has asked for a series of delays while it negotiated with the new Administration. On August 1, the United States Court of Appeals for the District of Columbia Circuit ruled that 17 states and the District of Columbia can intervene in this lawsuit. The Court agreed with the states that “accumulating public statements by high-level officials” raised concerns that the Trump Administration would continue defending the states’ interests.
