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Senate Looks to Stabilize Increasingly Turbulent ACA Markets

by Precise Leads

August 30, 2017

Hearings on ACA exchanges are scheduled for early September, but can lawmakers find a solution before open enrollment begins in November?

The leading Republican and Democrat on the Senate’s Health, Education, Labor and Pensions Committee have agreed to hold hearings on the Affordable Care Act state exchanges on September 6th and 7th. Led by committee chairman Sen. Lamar Alexander (R-TN) and Sen. Patty Murray (D-WA), the panel will hear from a bipartisan lineup of state insurance commissioners and governors.

If the committee does craft any legislation, Alexander has indicated it will likely be narrow in focus. Instead of an outright appeal, he has stated any bill that comes out of the committee will aim to stabilize the state exchanges while reducing premiums for 2018. “Any solution that Congress passes for a 2018 stabilization package will have to be small, bipartisan and balanced,” he told USA Today.

More Leeway to the States

Alexander has proposed continuing cost-sharing reduction (CSR) payments, a controversial provision of the ACA that requires the federal government to reimburse insurance companies for lowering out-of-pocket costs for low-income enrollees. In 2014, House Republicans filed a lawsuit against the Obama Administration arguing the subsidies were unconstitutional because Congress didn’t approve a separate appropriation for the payments.

After a federal court ruled in favor of the House Republicans, the Obama Administration appealed the decision in the District of Columbia Circuit Court. According to the Washington Post, the Trump Administration and House Republicans have indicated that they want to find a legislative solution before pursuing the court case further. Further complicating debate over the CSR payments is President Trump’s stated desire to halt the subsidies, although he did agree to fund the payments through August.

In exchange for funding the CSRs in 2018, Alexander supports giving states the ability to offer plans with less coverage, and therefore lower premiums. In addition, Republican Senators Lindsey Graham of South Carolina, Bill Cassidy of Louisiana, and Dean Heller of Nevada have advanced a similar proposal that would eliminate the ACA’s individual and employer mandates while transferring greater oversight over how the law’s taxes are spent to the states. Democrats like Senator Murray, meanwhile, hope to preserve protections for people with pre-existing conditions, according to The Atlantic.

Alexander has acknowledged that the committee faces a tight timeline. The Centers for Medicare and Medicaid Services (CMS) recently postponed the deadline for insurers to submit ACA rates for 2018 until September 5. Final contracts must be signed by September 27 and open enrollment begins on November 1. Without any assurances that the subsidies will continue, many insurers have already forwarded plans with higher premiums.

Alexander said that finding a fix before that date will be difficult, but possible. If the federal government extends the subsidies, the senator expects that insurers will reduce their premium requests.

What Will Happen

Whether ACA premiums rise or fall in 2018 hinges on the continuation of the CSR payments, so insurance agents should closely follow the Senate hearings to see if lawmakers decide whether the payments will continue into next year.

The outcome of the hearings could impact your clients that purchase health coverage from the state exchanges in other ways. Alexander and other GOP lawmakers have recommended giving states more authority in determining the benefits offered in insurance plans. Having more choices may not make the decision any easier for your clients. Consequently, insurance agents must advise their clients to choose the best plan that meets all their medical needs now and in the future at an affordable price.

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