Molina Healthcare Policy and Regulatory Affairs Committee (PRC) Task Force Weekly Round-up
Below please find the PRC Task Force News & Weekly Round-up which includes important events, reports, and analyses that will impact policy development and strategy.
This week's round-up includes:
1. AHIP Testimony at Senate Hearing on Stabilizing the Individual Market
2. House Energy and Commerce Hearing on Draft ACA Replacement Bills
3. Center on Budget and Policy Priorities Report on Cassidy-Collins Tax Provisions
4. Senate Committee Approves Price Nomination
AHIP Testimony at Senate Hearing on Stabilizing the Individual Market
On Wednesday, the Senate HELP Committee held a hearing on "Stabilizing the Individual Health Insurance Market." This hearing included testimony from AHIP, the National Association of Health Underwriters (NAHU), the Commissioner of the Tennessee Department of Commerce and Insurance, and former Kentucky Governor Steve Beshear.
Chairman Lamar Alexander (R-TN) emphasized in his opening remarks that Congress needs to take legislative action in the near future to stabilize the individual market. He noted that insurers need time to develop and file their products, and that if Congress fails to act, many Americans may not have coverage options in the individual market in 2018. Chairman Alexander suggested that legislation to stabilize the market in the short-term will need to be bipartisan, and that both Republicans and Democrats may need to approve certain proposals that they normally would not support.
Julie Mix McPeak, Commissioner of the Tennessee Department of Commerce and Insurance, emphasized in her remarks that insurance markets do not respond well to uncertainty. She urged Congress to give the states as much flexibility as possible to address their respective marketplace needs, and she called for swift reforms to age rating factors, essential health benefits (EHBs), special enrollment periods (SEPs), and grace periods.
AHIP President and CEO Marilyn Tavenner testified on behalf of AHIP, expressing support for many of McPeak's recommendations and also outlining AHIP's recommendations for both short-term solutions for stabilizing the individual market and longer-term principles for lasting improvements. She emphasized AHIP's support for continuing to provide the advanced premium tax credits (APTC) and cost-sharing reduction (CSR) payments in their entirety, and making full federal reinsurance payments for 2016. She further highlighted the importance of recalibrating premium subsidies to encourage younger adults to participate, federal risk pool funding, and continuous coverage incentives to promote a more stable and workable transition for consumers and families. With respect to longer-term principles, she focused on bringing down the cost of coverage, guaranteeing access to coverage for all Americans including those with pre-existing conditions, effective risk pooling mechanisms, adequate and well-designed tax credits that promote affordability, and state flexibility to promote innovation and choices for consumers.
Janet Trautwein, CEO of NAHU, testified in support of maintaining the reinsurance program and CSR payments, making changes to SEPs and grace periods, redefining the formula for medical loss ratios (MLRs), making regulatory changes with respect to EHBs and the types of plans offered to consumers, and providing employers relief from burdensome reporting requirements. Trautwein testified that the individual market will always need some additional backing - because there is no employer contribution - and therefore the structure and function of any tax credits is very important.
Former Kentucky Governor Steve Beshear discussed Kentucky's experience implementing the ACA and the Medicaid expansion, and he highlighted the positive social and financial impacts these changes have had in his state. He cautioned against repealing the ACA without a replacement plan, and stressed that any changes will negatively impact the health coverage and lives of real people.
Discussion also focused on the importance of risk corridor payments. Governor Beshear suggested that insurers have been forced to leave the market due to the defunding of the risk corridors program, while Senator Al Franken (D-MN) said that higher premiums and diminished choices can be attributed to lack of funding for risk corridor payments. During the Q&A portion of the hearing, Marilyn Tavenner reinforced the point that insurers priced their products based on an assumption that risk corridor payments would be made.
In addition to our written testimony, we want to share with you two new AHIP documents addressing related issues:
• Recommendations for Ensuring an Effective Health Care Transition for the American People
• Making Health Care Work for Every American: Recommendations for Regulatory and Administrative Fixes to Promote Short-Term Stability in the Individual Market
House Energy and Commerce Hearing on Draft ACA Replacement Bills
Yesterday, the House Energy and Commerce Subcommittee on Health held a hearing on four draft bills addressing issues that Congress is considering in the ACA repeal and replace debate.
The following draft bills were discussed in today's hearing:
• Plan Verification and Fairness Act: For plan years beginning on or after January 1, 2018, this bill would prohibit qualified health plans (QHPs) offered through an Exchange from making coverage effective for an individual seeking to enroll during a special enrollment period (SEP) until the Exchange verifies the individual's eligibility for the SEP using an "approved verification process." The bill defines this as a process that is specified by the HHS Secretary, through an interim final rulemaking, that requires applicants to submit documents to the Exchange to verify their eligibility to enroll during the SEP.
• State Age Rating Flexibility Act: For plan years beginning on or after January 1, 2018, this bill would allow states to set their own age rating rules and establish a 5:1 age rating band in states that do not take action.
• Health Coverage State Flexibility Act: For plan years beginning during or after 2018, this bill would align the current grace period with existing state law for recipients of advanced premium tax credits (APTC) - or establish a one-month grace period in states without any such law. This refers to the grace period that applies before coverage is discontinued in situations where enrollees are delinquent on their premium payment.
• Preexisting Conditions Protection and Continuous Coverage Incentive Act: This bill includes provisions that - following repeal of the ACA - would reestablish a guaranteed issued requirement, prohibit preexisting condition exclusions, and prohibit discrimination based on an individual's health status. The bill also includes a placeholder for unspecified provisions that will be added at a later date addressing incentives for individuals to maintain continuous coverage.
Subcommittee Chairman Michael Burgess (R-TX) emphasized that today's hearing is a step toward stabilizing and rebuilding the health care system. Although discussion at the hearing was divided along party lines, Burgess expressed confidence that the subcommittee will advance bipartisan legislation through an open and inclusive process. Full Committee Chairman Greg Walden (R-OR) cited data about rising premiums and diminished health plan choices, and cautioned that the individual health insurance market is "collapsing." He said that Congress is working hard to develop reconciliation legislation to repeal the ACA and that the committee is laying the foundation to rebuild America's health care markets.
AHIP submitted the following statement for the official record of this hearing.
Center on Budget and Policy Priorities Report on Cassidy-Collins Tax Provisions
On Thursday the Center on Budget and Policy Priorities released a report examining the ACA replacement proposal put forth by Sens. Cassidy and Collins - and in particular focused on changes to health savings accounts (HSAs) as alternative delivery mechanisms for subsidies for individuals to purchase coverage.
The authors find that while converting HSAs into something sharing features with Roth IRAs would allow for high-earners avoid taxes on more of their income, they would be an ineffective mechanism for providing coverage to low- and moderate income people. The subsidies that would be deposited into these accounts would be much less than those currently provided by the ACA, they argue, and would be spent quickly on health insurance premiums - leaving little or nothing left over to cover out-of-pocket costs.
Senate Committee Approves Price Nomination
On Wednesday, by a vote of 14 to 0, the Senate Finance Committee reported to the full Senate the nomination of Rep. Tom Price (R-GA) to serve as Secretary of Health and Human Services (HHS). All 14 votes were cast by Republicans. Democratic members of the committee did not attend this meeting.
The committee originally was scheduled to meet on Tuesday to vote on the Price nomination, but Democrats boycotted that meeting. As a result, today the committee approved a motion to suspend a rule addressing quorum requirements for nomination votes. This decision is explained in a statement by Chairman Orrin Hatch (R-UT).
The full Senate still needs to vote to confirm Rep. Price before he can take office as HHS Secretary.
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