After Lindsey Graham and Bill Cassidy announced another plan for healthcare reform, a bipartisan panel of governors offered their solutions to the Senate’s Health, Education, Labor and Pensions Committee.
Last month’s defeat of a Republican-sponsored healthcare reform bill has not ended disputes on the Affordable Care Act’s future. Earlier this month, the Senate’s Health, Education, Labor and Pensions Committee gathered a bipartisan group of governors and state insurance commissioners to discuss measures to stabilize the individual state exchange markets, many of which have been upended by the withdrawals of several major insurers.
Shortly before the hearings, Republican Senators Lindsey Graham of South Carolina and Bill Cassidy of Louisiana co-sponsored another ACA replacement bill that would give states the option to set essential coverages, establish a temporary fund to reimburse insurers for major losses, and eliminate the individual and employer mandates, though states could still reinstate the individual mandate.
The Graham-Cassidy bill, however, faces serious challenges as factions within the GOP struggle over its provisions. In addition, the Senate has twelve days to pass the bill and send it to the House of Representatives for a final congressional vote. Given the tight timeframe, the Congressional Budget Office may not have enough time to complete a full analysis of the bill’s impact, and Senate Republicans themselves might not have time to secure the votes needed for passage.
What the Governors Want
During the recent committee hearing, governors from both parties expressed their support for continuing cost-sharing subsidies that lower out-of-pocket costs for low-income exchange enrollees. These controversial payments are the subject of an ongoing lawsuit, and President Trump has expressed interest in cutting off federal funding for them. The Graham-Cassidy bill, meanwhile, proposes sending block grants to states, which could then be used to fund premium and cost-sharing subsidies.
Governors also agreed that the federal government should enable the states to devise healthcare plans for their residents, thereby freeing them from ACA restrictions. They also discussed a possible reinsurance fund that would help insurers pay for expenses incurred by severely ill patients. Lori Wing-Heier, Director of Insurance in Alaska, told the committee that a reinsurance pool established in her state last year curbed premium increases.
Prior to the Senate hearing, a bipartisan group of governors led by Republican John Kasich of Ohio and Democrat John Hickenlooper of Colorado sent a letter to Congressional leaders in the House and Senate outlining proposals to strengthen the individual ACA marketplace. Like their colleagues at the Senate hearing, Governors Kasich and Hickenlooper backed continued funding of subsidies, a reinsurance backstop, and the creation of a $15 billion annual “stability” fund provided to the states that would be used to lower premiums for enrollees in the state exchanges.
Governors Kasich and Hickenlooper further endorsed an exemption from federal health insurance taxes for those insurers that offer coverage in counties where they are the lone exchange provider. Alternatively, residents in those underserved counties would be permitted to buy insurance from the Federal Employee Health Benefits Program.
The Debate Continues
Unfortunately for agents and their clients, the ongoing debate over healthcare reform continues to create uncertainty regarding their coverage. For now, as trusted advisors, agents must monitor the discussions and inform their clients of any changes that could affect their coverage, such as a potential increase in premiums for older enrollees.
A possible solution for affected clients may be health savings accounts that permit those enrolled in high-deductible health plans to deposit money in a tax-advantage savings account. The funds are then used to pay for qualified medical expenses. Under the ACA, HSA contributions were capped, but the Graham-Cassidy proposal raises the limits. Now might be a time to discuss setting up an HSA with clients who might benefit from them.