Opening Statement: Stabilizing Premiums and Helping Individuals in the Individual Insurance Market for 2018: Health Care Stakeholders
Posted on September 14, 2017
The Senate Committee on Health, Education, Labor and Pensions will please come to order.
This morning we are holding our fourth hearing on stabilizing premiums and ensuring access to insurance in the individual health insurance market for 2018.
Ranking Member Murray and I will each have an opening statement, and then we will introduce our 5 witnesses. After their testimony, senators will each have an opportunity to ask the witnesses 5 minutes of questions.
We ought not to take for granted the three hearings this committee has held over the last 10 days.
For 7 years, hardly a civil word was spoken between Republicans and Democrats on the Affordable Care Act. But for the last 10 days, senators from both sides of the aisle have engaged in serious discussions for several hours at a time about what Congress can do between now and the end of the month to help limit premium increases for 18 million Americans next year and begin to lower premiums in the future—and also to prevent insurers from leaving the markets where those 18 million Americans buy insurance.
Last week, between the meetings held before our two hearings and the hearings themselves—for two consecutive days, half of the members of the United States Senate participated in bipartisan conversations about getting a result on health insurance.
At last week’s hearings, we heard first from state insurance commissioners, then from governors, and on Tuesday from experts in state flexibility.
During those hearings, three themes emerged that I believe represent a working consensus for stabilizing premiums in the individual insurance market in 2018:
The first theme is Congressional approval of a continued temporary funding of the cost-sharing payments that reduce co-pays and deductibles for many low-income Americans on the exchanges.
The second theme—Senators from both sides of the aisle suggested expanding the so-called “copper plan” already in the law so anyone—not just those 29 or under—could purchase a lower premium, higher deductible plan that keeps a medical catastrophe from turning into a financial catastrophe.
The third theme – advocated by state insurance commissioners, governors, and senators from both sides of the aisle— is to give states more flexibility in the approval of coverage, choices, and prices for health insurance.
Most of the discussion about flexibility has centered on amending the section 1332 state innovation waiver, because it is already in the Affordable Care Act.
In looking at 1332, we heard a number of commonsense suggestions about how to improve and speed up the process, such as reducing the six-month application review period and allowing a copycat application so that if Senator Murray’s state gets something approved, why can't Tennessee come along and say, “We want to do what Washington state did with one change?”
These changes will make it easier for states to use 1332 waivers to create programs, like the reinsurance program in Alaska or the invisible high risk pool in Maine, to help cover higher-cost individuals.
At Tuesday’s hearing on state flexibility, witnesses recommended how to amend 1332 to give states the authority to offer a larger variety of health insurance plans with varying benefits and payment rules.
That was discussed extensively at our hearing on Tuesday by all 5 witnesses. And several witnesses suggested that “actuarial equivalency” is a useful way to do that. That means, in effect, that while states might be able to offer plans with varying levels of benefits, that the value of the plans to consumers has to be similar to the plans currently offered on the Affordable Care Act exchanges or in the individual market.
At our hearing on Tuesday, Governor Michael Leavitt, former Secretary of Health and Human Services, suggested that with this approach plans would be of equal value but wouldn’t have to be carbon copies of one another.
He used a car as an example – if you looked at several $25,000 cars, one might have a backup camera, one might have more horsepower, but they’re still $25,000 cars.
So health plans might have different benefits, but they’d have to be of the same value to the consumer.
He testified that this “actuarial equivalence,” would give states “the ability to construct an option menu of benefits and provide either the state or even consumers with the ability to choose plans that weigh those differently.”
The governor of Massachusetts made a similar suggestion last week at our hearing.
He said that, with current regulations and guidance, 1332 waivers are administered in such a way that a state essentially can’t offer anything but an existing Affordable Care Act exchange plan.
Governor Baker testified: “Greater flexibility is also needed around benefit design. Value-Based Insurance Design approaches to benefit design seek to align patients’ out-of-pocket costs, such as copayments and deductibles, with the value of services.”
“Massachusetts is committed to providing access to quality, affordable health insurance for our residents; rather than walking away from that commitment, we believe that increased flexibility would allow us to meet that commitment in more effective ways.”
This type of approach to insurance allows individuals the opportunity to have a more personalized health insurance plan. It can benefit healthy individuals, as well as those with complex and chronic medical conditions.
I made clear at Tuesday’s hearing that I am not in any way proposing that we change the patient protection guardrails already written in section 1332: including the pre-existing condition protections-- that nobody can be charged more if they have a pre-existing condition and that everyone is guaranteed to be sold insurance; the requirement that your insurance policy can’t be rescinded; those under 26 may remain on their parents’ insurance; and there may be no annual or lifetime limits on your health benefits.
Our goal is to see if we can come to a consensus by early next week so we can hand Senator McConnell and Senator Schumer an agreement that Congress can pass by the end of the month that would help limit premium increases for 18 million Americans next year and begin to lower premiums after that, and to prevent insurers from leaving the markets where those 18 million Americans buy insurance.
So that’s our schedule.
What happens if we don’t succeed?
Last year, 4 percent of American counties had one insurance company on the exchange. This year, 36 percent have one insurer on the exchange. And for 2018, the Centers for Medicaid and Medicare Services tells us that one-half of the counties will have one or zero insurers on the exchange. In Tennessee, it's 78 of our 95 counties.
And we’ve heard from the state insurance commissioners that this by itself drives up premiums because it creates monopolies in all those counties.
Without cost-sharing reduction payments, the Congressional Budget Office, the Joint Committee on Taxation, and our witnesses have said that premiums will increase an additional 20 percent in 2018.
Premiums go up 20 percent, the federal debt goes up $194 billion over 10 years, and 5 percent of people will be living in bare counties after just one year.
Let’s also keep in mind that even if the president wanted to extend the cost-sharing payments, the courts might not allow him to. The Federal District Court for District of Columbia has said that the administration doesn’t have the authority to continue the cost-sharing reduction payments because Congress never appropriated the funds.
I want a result, and a part of a result that limits premium increases in 2018 and begins to lower premiums in the future, is flexibility for states in the approval of coverage, choices, and prices for health insurance.
To get a result, Republicans will have to agree to something, additional funding through the Affordable Care Act, that some are reluctant to support. And Democrats will have to agree to something, more flexibility for states, that some are may be reluctant to support.
I simply won’t be able to persuade the Republican majority in the Senate, the Republican majority in the House, and to the Republican president to extend the cost-sharing payments without giving states meaningful flexibility.
Now to today’s hearing – today we are looking at what patients are facing if we do not reach a compromise.
For example, we’ll hear what happens when an insurance plan leaves your state, and when you lose your doctor in the middle of your care.
It’s clear that to truly protect patients, we need to stabilize the markets, limit premium increases, and begin to lower premiums in the future.
I look forward to the testimony of our witnesses.