Posted on August 29, 2017
Sen. Lamar Alexander will hold bipartisan hearings in early September in a last minute attempt to assure insurers of the federal government's commitment to the individual market, and pave the way for states to ask for flexibility on insurance benefits.
Alexander, R-Tenn., is looking to drum up support for a "bipartisan way to get a limited result that actually helps people" after tumultuous months of heated debate over whether to repeal-and-replace the Affordable Care Act that ultimately handed the Republicans a defeat, he said during an interview with The Tennessean.
"Congress doesn’t do comprehensive well and I think it makes much more sense to go step-by-step especially since the last seven years have been so partisan. If we can agree on a single, limited bipartisan step in September... then we could take second steps, and there are obvious steps," said Alexander, who chairs the Senate Health, Education, Labor and Pensions Committee.
Alexander wants to extend cost-sharing reduction payments through 2018, and change a section of the ACA to give states more flexibility.
The timing will be difficult, he said, but necessary.
He preferred a repeal, but now wants to make sure that insurers don't have a reason to decide last minute to pull out of the exchange — which happened in three Tennessee metro areas a year ago.
There are more than 300,000 Tennesseans who buy insurance, whether on the exchange, off-exchange, in grandfathered plans or have plans that don't meet federal guidelines. Alexander said he wants to try to stem rising plan costs, and thinks Congress could take two steps to do that.
Is there appetite in Congress right now to pick up discussion about healthcare or is that something that will be overshadowed by taxes, the debt ceiling and just fatigue from the repeal-and-replace debate?
I think Republicans are disappointed that we haven’t been able to get a result on health care and we’re ready to go to tax reform, which is much more basic to growing the economy and creating jobs in the country so we’re eager to get to that.
I think what most senators are going go to be hearing when they are at home is ‘don’t leave us out to dry. We don’t want to get to the end of September and be told our premiums are going to go up again or our deductibles are going to go up again or we might not be able to buy any health insurance.’
I think there is going to be appetite for a limited bipartisan solution just to this individual market. It’s just 6 percent of all the people who buy insurance. Most people aren’t aware of that. We talk about the Obamacare debate and it sounds like we’re talking about all 300 million Americans with insurance. It’s just 6 percent. They are every one important and they are some of the most vulnerable Americans, most vulnerable Tennesseans.
Centene has been coming into some of the counties that were projected to be bare in 2018. As of Aug. 24, there are no counties projected to be without an insurer. Do you companies filling the gaps alleviated consumers’ fears that they could be without choices?
My fear isn’t alleviated because I remember what happened last year at the end of September. BlueCross BlueShield of Tennessee, which is our largest insurer, announced it was pulling out of Memphis, Nashville and Knoxville. Not just for people on the exchanges who have subsidies, but for everybody who wants to buy insurance and doesn’t get it on the job or from the government.
That happened at the end of September a year ago. That could happen again. I hope it doesn’t.
What we do know is if we act in September in Congress to continue the cost-sharing payments for one year and to give states more flexibility in how they approve insurance policies that we won’t have any counties with zero options and that we will have lower insurance premiums.
BCBST’s decision took a lot of people by surprise. Has that been a factor for you?
It has been a factor because there was a threat in the midst of this year that we’d have a number of counties that had zero options for 2018. That for the moment has been corrected by a lot of scrambling by (Tennessee Insurance Commissioner) Julie McPeak.
(Insurers) could pull out (before) October if we don’t act. I would be worried if I was a Tennessean with an income of $55,000 and I had lupus, I’d be worried that either my premiums would take a big jump or I wouldn’t be able to buy insurance at all.
Farm Bureau Health Plans came in and they sold for the first time but will not sell in 2018 because of losses. When you think about the dynamics of supply and demand, which is really complex in health care, at what point does Congress need to start thinking about the underlying costs associated with care?
We should do that. We’ve had one hearing on drug prices for example, which are 15 percent of the costs of healthcare, and by far the larger problem in the United States that we spend 17-18 percent of our gross domestic product on healthcare, which is twice what it is in many other developed countries. Now we like the health care we get, for the most part, and almost everybody is insured. Health insurance problems are mostly in the individual market — somewhat in Medicaid and in the employer market.
But the bigger problem is overall health carecosts. I have two more hearings on drug prices scheduled for the fall.
But if your house is on fire then you want to put out the fire and the fire right now is in the individual market. We have to come to a consensus in the Senate by mid-September so we can act by the end of September to stabilize this market so people can afford to buy insurance in 2018.
The president at his rally in Phoenix brought up in passing that Obamacare was going to be repealed. What you’re talking about is at least a short-term stabilization of the existing policies. How do you reconcile the two approaches?
Well, they are two different approaches. I would prefer the Republican bill that would repeal major parts of the Affordable Care Act and replace it with a different structure that gave more authority to states and more choices to consumers. That hasn’t passed. But I can’t sit around in September if it doesn’t pass and let 350,000 Tennesseans run the risk of more premium increases, more deductible increases and the possibility of not being able to buy insurance at all.
Even if (a) Republican bill were to pass there is still plenty of work to be done over the long term on the individual insurance market. But they are parallel tracks.
Have you had any conversations with insurers and gotten indications that they are at risk of leaving?
Oh sure. I’ve talked to most of the major insurance companies and they’ve made it clear 1) they are going to increase premiums based on our inaction and 2) they might leave. So in the end it’s up to their negation with the state insurance commissioner but if we create an environment in which they come into Tennessee or parts of Tennessee and the expenses they have to pay out are more than the money they take in they can’t afford to stay.
Commissioner McPeak was skeptical back in May that she would be able to do something under a waiver for 2018. Is that something for 2019 — does that mean the individual market will be around for longer?
Well it would be a permanent change in Sect. 1332 and it would make it clear that whatever changes the administration were to approve would be lasting and one of the changes we’d like to make in 1332 is to expedite the consideration Washington gives to the state of Tennessee’s request for a different way of approving insurance policies. Hopefully some of that effect would take place in 2018.
BlueCross has said that about 21 percent of its proposed increase for next year comes from no payments from cost reductions, which I would continue, and uncertainty at the federal level so we know we can stabilize premiums in Tennessee if we make those changes and I think the experience Alaska has just showed us that with a very difficult to work with Sect. 1332 suggests that we could actually lower premiums certainly after 2018, and may have some impact on 2018.
Part of BCBST’s increase was attributed to uncertainty about whether there would be the same number of enrollees. Have you had any discussions with (Health and Human Services) Sec. (Tom) Price or others in the Trump administration about advertising and campaigning for open enrollment?
No, I haven’t. I haven’t.
I think the major uncertainty that Congress can deal with is whether there will be cost sharing reduction payments in 2018 and whether Sect. 1332 will set up a waiver system so Alaska, New York, Tennessee and Texas can have choices of insurance policies that fits those different states. That’s the certainty we can address.
How would you characterize what happened over the last few months regarding health care reform and where is the Republican Party at right now?
We just have a very big difference of opinion, which shouldn’t surprise anybody because that’s what Congress is elected to resolve. For example, I believe, and most Republicans believe, that the fundamental flaw with the Affordable Care Act is that it moved too many decisions to Washington and it made health insurance too expensive and fundamentally what we want to do is move more of the decisions, particularly with the individual market and small businesses, back to the states and give states an opportunity to give small businesses and individuals more choices.
Democrats disagree with that. They think those decisions should be made in Washington. That’s basically what we’ve been fighting about over the last seven years – well, we haven’t succeeded in our point of view so we don’t take our ball and go home. We recognize we’ve got 350,000 Tennesseans, about half of whom don’t have any government support for their insurance.
I use the example of a songwriter in Nashville with lupus making $55,000 a year — not that many songwriters do that actually — but he or she needs to be able to afford health insurance next year. That’s where our focus ought to be rather than argue about the entire system right now.
My focus is on the Tennesseans in the market who have no government support or limited government support and have seen their premiums go up 176 percent go up in four years, their copays and deductibles go up and they are worried they may not be able to buy any insurance.
That’s true in many states. That’s where the focus ought to be.
Part of the increase in copays, premiums and deductibles, is the risk pool — the claims. Tennessee is an unhealthy state with lots of diseases being diagnosed and treated — do you think that has to be factor in the conversation?
Of course it does. Most of the Republican senators I’ve talked to understand the more you deal with the very sickest Americans who consume a huge amount of the health care costs, once their needs are taken care of you then lower the costs for everyone else in the health care market.
What Alaska was able to do with the Sect. 1332 waiver that was just approved is to take some of the money that comes from the federal government to Alaska to pay for Obamacare subsidies and move it to reinsurance. When they did that they took, care of the very sickest people in Alaska and were able to reduce premiums for everybody else by about 20 percent.
(Reporter’s note: Alaska has had the highest premiums on the federally run exchange)
A fundamental part of what we need to do to create a really strong market is to find a way to deal with the sickest Americans who consume 50 to 80 percent of all of our health care costs.