GOP fretting over whether they hate abortion more than they love saving their own skins.
2019 OPEN ENROLLMENT ENDS (most states)
Time: D H M S
Sens. Lamar Alexander and Susan Collins have proposed a market stabilization package that would include funding for the Affordable Care Act's cost-sharing reduction subsidies for three years, three years of federal reinsurance at $10 billion a year, additional ACA waiver flexibility for states, and expanded eligibility for "copper" plans.
Alexander presented the plan yesterday to America's Health Insurance Plan's board of directors, adding that if Democratic leadership supports the bill, “it’ll be law by the end of next week." Alexander has long said the package should be included on the omnibus spending bill.
Between the lines: This doesn't solve the partisan dispute over abortion language, as it'd bar plans that offer abortion coverage from receiving federal subsidies. But it hints that there's Republican support behind a set of policy changes that could substantially lower premiums ahead of the 2018 elections.
This news mostly confirms that the proposal which Oliver Wyman's projection analysis from the other day referred to is legit:
More recent congressional attention is focusing on a proposal that includes an extension of CSRs and a reinsurance program in 2019, 2020, and 2021, funded with a $10 billion appropriation in each year, with a federal fallback option available to states in 2019. The federal fallback option would likely be based on – and use the federal infrastructure built to administer – the Transitional Reinsurance Program in place from 2014 through 2016.
Owens doesn't clarify whether those are the only elements of the proposed Omnibus deal, but if so, it's an updated/blended version of the previous Alexander-Murray & Collins-Nelson bills, and would include:
- 1. Three years of CSR reimbursement funding appropriation (I assume they'd tack on the money still owed to the carriers from Q4 2017 as well)
- 2. Three years of reinsurance funding at $10 billion per year
- 3. "Copper Plans" being made available to anyone on the ACA exchange (presumably this would just remove the under-30 age cap on "Catastrophic" plans)
- 4. Waiver "flexibility" (WARNING--this could be a good thing or a bad thing depending on the specifics!)
And of course, the piece of poo floating in the pool...
- 5. Barring abortion coverage from any exchange policy, period
#4 ("waiver flexibility") might be harmless or harmful; I can't draw any conclusions about it without knowing specifics.
I presume the idea here would be to expand/rebrand Catastrophic plans as "Copper Plans" to everyone. It may or may not allow APTC subsidies to be applied towards them, but even if they aren't, the plans are dirt cheap to begin with. Personally, I think these are a lousy choice for most people, but if the choice is between them getting one of these plans or going off-exchange to a "short-term plan" or some other "mini-med" (aka a junk plan which doesn't include the same EHBs or which allow people with pre-existing conditions to be discriminated against), then this is still much better for one important reason: The Single Risk Pool.
Currently, as Washington State actuary Rebecca Stob explained to me, one of the reasons why Catastrophic plans are so dirt cheap is because they're on their own, separate risk pool (at least for purposes of Risk Adjustment...I'm a little fuzzy on the distinction between that and Price Indexing).
...This is vitally important, because it means that one of two things happens: Either a lot of people go for Copper...or hardly anyone does.
If very few do, it's no skin off of anyone's nose, and it becomes a meaningless concession. If a lot of people do, well, they'll probably have made a poor choice in most cases...but they'll still be part of the same risk pool, so they won't make it any worse for all the Bronze/Silver/Gold/Platinum folks. In fact, it might even have a net positive effect, by bringing in 1-2 million more of the very Young Invincible types that the exchanges have been starving for all along.
In short, I'm sort of iffy on Copper Plans, but I'd be willing to live with them if necessary.
That leaves #1 (CSR funding) and #5 (abortion coverage).
As I've written about too many times to remember, I was in favor of funding CSR reimbursements for much of last year...but the moment that the carriers/exchanges/regulators came up with the Silver Load/Silver Switch workaround, I completely changed my tune. The CSR/premium/subsidy situation is completely turned around now, to the point that funding CSRs NOW would actually hurt more people than it helps...at least without some other significant restructuring or enhancement of the subsidy formula, anyway.
As Colin Baillio of Health Action New Mexico put it:
Here’s what ending CSRs did for New Mexicans. Reinstating CSRs will raise costs for working families.
— Colin B (@colinb1123) March 14, 2018
Finally, there's the abortion language, which is just a big tired old crock of stupid for several reasons.
The ACA allows the coverage of abortion services through the marketplaces but includes a number of restrictions and requirements that insurers must follow before covering non-Hyde abortions. Many, though not all, of these restrictions are outlined in Section 1303 of the ACA, which includes specific rules related to the coverage of abortion services by QHPs and has been the subject of previous litigation. In particular, Section 1303:
- Prohibits insurers from using any portion of premium tax credits or cost-sharing reduction payments to pay for non-Hyde abortion services;
- Requires insurers to inform consumers in their summary of benefits and coverage that the QHP they are considering includes coverage of non-Hyde abortion services; and
- Requires insurers that cover non-Hyde abortions to determine the cost of and then separately collect and segregate funds for non-Hyde abortion services.
Section 1303 further specifies that individuals who purchase insurance that covers abortions must pay at least one dollar into a separate account specifically designated for abortion. These segregated accounts are designed to help ensure that the accounts are 1) funded solely by the enrollee’s premium (rather than by the premium tax credit) and 2) used exclusively to fund non-Hyde abortion services. Section 1303 also allows states to ban the coverage of abortions by QHPs sold through the marketplaces: to date, twenty-six states have done so. In an additional six states, no marketplace plans offered coverage for abortion during the 2016 plan year. Two states—California and New York—require health plans to cover abortions, subject to an exception for multistate plans, at least one of which in each state must offer insurance without abortion coverage.
The actual wording of Section 1303 clarifies that the "separate account" payment has to be at least $1.00 per month per enrollee:
(C) <<NOTE: Cost estimate.>> Actuarial value of optional service coverage.-- (i) In general.--The Secretary shall estimate the basic per enrollee, per month cost, determined on an average actuarial basis, for including coverage under a qualified health plan of the services described in paragraph (1)(B)(i). (ii) Considerations.--In making such estimate, the Secretary-- (I) may take into account the impact on overall costs of the inclusion of such coverage, but may not take into account any cost reduction estimated [[Page 124 STAT. 171]] to result from such services, including prenatal care, delivery, or postnatal care; (II) shall estimate such costs as if such coverage were included for the entire population covered; and (III) may not estimate such a cost at less than $1 per enrollee, per month.
As I noted at the time, due to the absurdly ham-handed and convoluted hoops that insurance carriers have to jump through in order to offer abortion coverage on their exchange plans now, the end result is that there's likely a good $70 million or so just sitting around gathering interest in "abortion funds" around the country for no reason whatsoever, instead of being used to keep premiums a bit lower or whatever.
Well, the GOP has apparently come up with their own simple solution to this situation: They want to make it illegal for any exchange plan to offer abortion services at all, since all exchange plans have to offer APTC tax credits.
I should note that in addition to the other obivous problems with this, it would also open up a huge can of legal worms, since:
California and New York have required all ACA exchange policies to cover abortion for years, and Oregon recently passed a similar law. It's also my understanding that while Massachusetts doesn't legally require it, the insurance dept. and state exchange strongly encourage carriers to do so.
It's possible that the Alexander-Collins plan would only apply to the federal exchange, which would cut CA and NY out of the loop as they both operate their own exchanges...but Oregon might be in a pickle, since they rely on HealthCare.Gov to run their platfom. Not sure about that.
Of course, regardless of whether this is limited to HC.gov or not, putting the kibosh on any abortion coverage being offered even if paid for directly by the enrollee should be completely unacceptable to Congressional Democrats, period...and judging by the developments the past week, that appears to be the case; good.
If that's removed from the equation, we're left with four items: CSRs, reinsurance, Copper plans and "waiver flexibility".
My take? Drop the Abortion & CSR language, keep the Reinsurance, Copper Plans and Flexibility.
$10 billion/year in reinsurance would substantially lower premiums for unsubsidized enrollees without raising the net cost for subsidized folks. Copper plans would at the very least scratch one of the attack points on the ACA exchanges off the list, while also making the policy types easier to explain ("Platinum/Gold/Silver/Bronze/Copper" is easier than "P/G/S/B...oh, and there's also these "Catastrophic only" plans which are only available if you're under 30..."). Making waivers flexible would...I dunno, make them more flexible, I guess.
Now, politically, it's probably in the Democrats best interest not to agree to any stabilization measures--a classic case of flipping the script on what the GOP did to the Obama Administration for 8 years by refusing to lift a finger to help improve the law. However, at least in the case of reinsurance, they'd be helping people without hurting anyone in the process.
Appropriating the CSR reimbursements at this point, however, would raise net costs for several million people, effectively cancelling out any good it did. For that matter, the only "good" it did would involve reversing the impact of the very sabotage of the law which the GOP themselves deliberately caused to happen in the first place.
This is the essence of chutzpah: Trump & the GOP deliberately caused unsubsidized premiums to increase by a good 15% by bringing the lawsuit and cutting off payments in the first place...then turn around a year later and appropriate the very funding they caused to be cut off, lowering unsubsidized premiums by 10% and claiming "SEE! WE LOWERED OBAMACARE PREMIUMS! VOTE FOR US!"
The Dems should walk away from this unless both the abortion & CSR elements are removed.