Health care markets face unsure future

Health insurance marketplace enrollment begins Nov. 1, despite efforts to repeal ACA 

In the shadow of the failed effort to repeal and replace the Affordable Care Act (ACA), recent administrative action, legislative efforts and the kick-off of 2018 open enrollment on Nov. 1 has put the ACA’s marketplaces in the spotlight.

Approximately 7 percent of the U.S. population, or 22 million people, receive their health insurance through this ACA-created system intended to provide a mechanism for health coverage for those who were previously uninsured. By comparison, employer-based health systems and the Medicaid and Medicare programs cover more than 250 million people, and are largely unaffected by these developments.

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Congressional Budget Office (CBO) report on eliminating subsidies to insurance companies

Bipartisan Stabilization Health Care Act of 2017 [bill number not available at press time; bill text here].

A report released by the CBO on October 25 estimates that the bill would reduce the federal deficit by $3.8 billion over the next decade.

On Oct. 12, the White House announced that the Department of Health and Human Services secretary will no longer make cost-sharing reduction payments (CSRs) to insurers participating in the marketplaces. These payments — which the current administration had been making on a month-by-month basis — reimburse insurers for the subsidies they are legally required to make for low-income individuals who are enrolled on the marketplaces.

The cost-sharing subsidies that reduce deductibles and copayments for enrollees are one type of financial help that the ACA provided to lower-income consumers buying insurance on the marketplace.

Other help comes in the form of a tax credit, typically available for people with incomes of up to 400 percent of the poverty level. In 2017, 400 percent poverty level for a family of four tops out at $98,400.

CSRs have been the subject of extensive litigation. Most notably in 2014, the House sued the Obama administration in House v. Burwell (now House v. Price) claiming that these payments to insurers had never been appropriated by Congress and were thus illegal.

A district court judge accepted this argument in the spring of 2016 and the Obama administration appealed, arguing that there was in fact an appropriation. The Trump administration had not taken a position, and until the Oct.12 continued to make the payments.

Following the administration’s decision, attorney generals from 19 states filed lawsuits against President Trump arguing his decision violated federal law, asking for an injunction that would force the administration to make CSRs.  They were turned down on Oct. 25 when a federal judge — an Obama administration appointee in the U.S. District Court for the Northern District of California — said the Trump administration had a stronger legal argument for stopping the payments than the state attorneys general had.

Even before the White House’s announcement, marketplace stabilization and funding certainty for insurers participating in them was the focus of congressional hearings convened in September by Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), the chair and ranking member of the Senate Health, Education Labor and Pensions (HELP) Committee.

On Oct.16, Alexander and Murray introduced the Bipartisan Stabilization Health Care Act of 2017. The bi-partisan measure would fund the CSRs for the rest of 2017,  2018 and 2019, and would direct $106 million to states for marketplace enrollment outreach in 2018 and 2019. It would also provide states more flexibility in seeking approval for and implementing what are known as 1332 waivers. Created by Section 1332 of the ACA, these waivers allow states to modify how they implement key elements of the ACA.

A report released by the CBO Oct. 25 estimates that the bill would reduce the federal deficit by $3.8 billion over the next decade.

The Alexander-Murray package is co-sponsored by 24 senators — 12 Republicans and 12 Democrats. With the expected votes of all Senate Democrats, it would have the 60 votes needed to pass the Senate. Senate Majority Leader Mitch McConnell (R-Ky.) has indicated he would only bring the bill to the Senate floor if Trump supports it and will sign. Meanwhile, House Speaker Paul Ryan (R-Wis.) and other House Republicans have voiced their opposition to the measure.

The House Ways and Means Committee Chairman Kevin Brady (R.-Texas) and Senate Finance Committee chairman Sen. Orrin Hatch (R-Utah) announced a new competing legislative agreement, Oct. 24, that would fund CSRs through 2019, but also would repeal the ACA’s individual and employer mandates. The introduction of this legislation by the leaders of two Congressional committees that also hold jurisdiction over health care and mixed signals from Trump on the Murray-Alexander package further complicate ACA marketplace stabilization efforts.

It is now widely expected that any such legislation would be wrapped in to a package that would fund the federal government past Dec. 8 and raise the debt ceiling.

Legislation to reauthorize funding for a variety of health and human services programs including the Children’s Health Insurance Program (CHIP), community health centers, the Maternal Infant Early Childhood Home Visiting Program (MIECHV) and payments to disproportionate share hospitals (DSH) is also likely to be included in this must-pass vehicle. 

Open enrollment in the individual marketplaces for the 2018 year runs from Nov. 1 through Dec. 15 of this year in most states, including those using healthcare.gov. The sign-up period of 45 days is shorter than the 90-day window in previous years. Coverage takes effect on Jan. 1, 2018.

Open enrollment in states that run their own marketplaces depends on the state. For instance, California, Colorado, Connecticut, Massachusetts, Minnesota, New York, Rhode Island and Washington have extended open enrollment beyond Dec. 15. For consumers that are already in a marketplace plan, they may be automatically renewed into that plan for 2018 and could face higher premiums. If their plan is no longer offered in 2018, the marketplace will automatically enroll them in a different plan.

Despite widespread confusion, every American is still legally required to carry health insurance or face a tax penalty. Every county in the U.S. currently has at least one insurer on the marketplace, and the two types of help for consumers—cost-sharing subsidies and tax credits—are still available. The administration has drastically reduced funding for “navigators,” organizations and individuals who help explain health insurance options, and advertising for open enrollment. Private insurance companies and nonprofit groups have been trying to fill in the gaps.

Counties invest over $80 billion annually in community health systems and often serve as the payer of last resort for those who are unable to afford health care. Many states require counties to provide some health care for low-income, uninsured and underinsured residents. NACo supports expanding health coverage to help counties protect the health and welfare of their residents and meet their legislatively mandated responsibilities. NACo will continue to monitor legislative developments and their potential impact to counties.