State Insurance Commissioners and Governors Testify Before the Senate HELP Committee

The US Senate’s Committee on Health, Education, Labor, and Pensions (HELP Committee) held the first 2 of its 4 full committee hearings on stabilizing the Affordable Care Act (ACA)’s individual insurance market. Testifying on Wednesday and Thursday were state insurance commissioners and state governors, respectively.

Across the 2 days of testimony, key themes emerged:

Funding Cost-Sharing Reduction (CSR) Payments

CSR payments provide financial assistance to consumers who make from 100% to 250% of the poverty line to help them cover copayments and deductibles. Paid in the form of subsidies to insurance companies, CSRs are provided for in the ACA. The Trump Administration has signaled that it might put an end to CSR payments, a move broadly opposed by those providing testimony in this week’s hearings.

Montana Governor Steve Bullock (D) said that “the Administration’s mixed—and at times hostile—signals regarding the CSR payments and other destabilizing actions has led Montana’s largest insurer to propose a rate hike for the next year that’s 10 times higher than it would have been under current provisions of the ACA.”

Massachusetts Governor Charles Baker (R) said, “month to month resuscitation of [CSRs] is not stabilization; [CSRs] should be maintained for at least 2 years.” Most of Baker’s peers agreed that CSRs should be extended until at least 2019, while Washington’s state insurance commissioner, Mike Kreidler, called for a permanent appropriation for CSRs.

Creating a Federal Reinsurance Program

Reinsurance programs provide payment to health plans that cover higher-cost participants as a way to insulate premiums from increasing by offsetting the higher cost of individual enrollees. Kreidler proposed enactment of a federal reinsurance program with a minimum duration of 3 years. He said that, while enactment of such a program now would likely not affect 2018 insurance rates, it would encourage insurers to participate in the 2018 market.

Teresa Miller, Pennsylvania’s acting secretary of the department of human services, said, “A $15 billion reinsurance program in the context of a careful, bipartisan approach to improving our healthcare system would be something I would view favorably, especially if the individual mandate were preserved and outreach was boosted to improve enrollment in individual market plans.”

Providing Flexibility to States

The ACA provides the possibility of state waivers on portions of the ACA so long as they do not increase the federal deficit or reduce access to coverage. Miller joined many of her colleagues in calling for a streamlined waiver process that would allow states to adjust their policies to their constituents.

Governor John Hickenlooper (D) of Colorado further requested tax incentives for companies to enter counties with only 1 insurer on the exchange, while Utah Governor Gary Herbert (R) urged Congress to provide incentives that would appeal to healthier, younger enrollees in order to maintain broad participation in the individual marketplace. John Doak, commissioner of the Oklahoma Department of Insurance, argued for expansion of health savings accounts.

Controlling Growing Health Costs

Governors and insurance commissioners were in agreement that healthcare costs must be addressed as part of the overall problem of affordable healthcare. Governor Bill Haslam (R) of Tennessee advocated for a shift to value-based care, saying that “one of the drivers of healthcare costs is the misalignment of incentives that is created when we compensate providers based on the volume of care they provide rather than on outcomes or efficiency.”

Miller called for bipartisan work on bringing down the cost of healthcare overall, saying “We need to have a serious national conversation about how we can moderate the unsustainable growth in healthcare costs, especially in areas experiencing astronomical growth in cost, like we currently see in pharmaceutical costs.” Baker, too, highlighted the growing cost of drugs, saying that pharmaceutical costs grew by 8% in his state last year.

Creating a Sense of Urgency

Across party lines, commissioners and governors urged Congress to move quickly; Lori Wing‐Heier, director of Alaska’s division of insurance, reminded Congress that insurers’ rate filings are to be approved next week, and that “Any decisions made after the filings are approved could cause unintended, unfavorable disruptions to insurance markets.”

The HELP committee will hold additional hearings on September 12, during which it will consider state flexibility under the ACA, and on September 14, when it will hear testimony from a variety of healthcare stakeholders.