Part 4 of Mainebiz series: How one ACA insurer is navigating the turbulent health insurance marketplace
COURTESY / OFFICE OF SEN. SUSAN COLLINS
U.S. Sen. Susan Collins, R-Maine, speaking from the floor of the Senate in mid-January as she about introduced an ACA replacement bill with U.S. Sen. Bill Cassidy, R-La. Collins is expected to be a key player as the U.S. Senate debates an ACA replacement bill developed in secret by a select group of senators that was scheduled to be released today. A vote on the Senate bill could take place as early as next week.
The Republican-led effort to repeal and replace Obamacare is accelerating, with the White House launching a webpage Wednesday dedicated to that effort and the U.S. Senate scheduled to release its replacement bill today after a month of a select group of Republican senators working on it in secret.
Senate Majority Leader Mitch McConnell, R-Kentucky, has said he'd like to bring the Senate bill, The Better Care Reconciliation Act of 2017, to a vote next week.
The Washington Post reported today that a “discussion draft” released Wednesday afternoon revealed that the Senate bill would roll back the ACA’s taxes, phase down the Medicaid expansion, reconfigure its subsidies, eliminate federal funding for Planned Parenthood and give states wider latitude in opting out of its regulation.
In an important difference with the House bill that passed 217-213 last month, the Senate bill ties federal insurance subsidies to income, as does the ACA, rather than to age, as the House plan had called for, the Washington Post reported.
A likely key player in the coming debate is Sen. Susan Collins, R-Maine, who in January released with Sen. Bill Cassidy, R-Louisiana, The Patient Freedom Act of 2017, a comprehensive replacement plan for Obamacare that would give Maine and other states greater say in setting rules for their health insurance markets.
Annie Clark, Sen. Collins’ communications director, issued this statement regarding Thursday’s release of the Senate health care bill:
“Sen. Collins will carefully review the text of the Senate health care bill this week and into the weekend. She has a number of concerns and will be particularly interested in examining the forthcoming Congressional Budget Office analysis on the impact on insurance coverage, the effect on insurance premiums, and the changes in the Medicaid program. She has met with and heard the concerns of many Mainers about their health care challenges, and she will continue to do so as she studies the impact of this legislation on Maine and the nation.”
In this fourth part of a five-day series, “How one ACA insurer is navigating the turbulent health insurance marketplace," Mainebiz asked Community Health Options CEO Kevin Lewis about the Collins-Cassidy proposal. The following is from an edited transcript.
Mainebiz: What’s your sense of what’s likely to be approved by the Republican-led Congress? The Republican’s stated goal is to repeal it and replace it. About the only thing that seems evident at this point is that they’re finding it’s not an easy thing to create a comprehensive health care law.
Kevin Lewis: I think health care policy in America, no matter who is in charge, is not an easy thing. My hope is that we can get beyond the politics and actually look at what are the policies that we need to fix some of the shortcomings of the ACA, and tend to those. I think the bipartisan goal should be, and reinforced earlier by many voices, including the president: Maintain coverage, maintain consumer protections, and increase competition.
Now how we get there means different things to different people. I recognize that.
But we have to be more mindful in the planning for it, rather than the extreme uncertainty that exists today.
The market is really unsettled at the moment. It may be asking too much for the politics of the moment to achieve something that’s more mindful and deliberative in the planning of the fixes to our country’s health care policy challenges, but frankly it’s what we need.
MB: Sen. Collins has submitted a bill with Louisiana Sen. Bill Cassidy. What’s your perspective on her approach?
KL: My sense of it is that it’s a thoughtful response to trying to find a meaningful solution to the many different perspectives involved with the ACA.
MB: Do you as a company have a voice in how that proposal might be fleshed out?
KL: Yes. Our congressional delegation has been very receptive to issues that we’ve brought to their attention. We’re blessed with good representation and they are very mindful of the impact on their districts and on the people of Maine. For us, there are some necessary parts to whatever ends up being the new paradigm.
MB: Such as?
KL: There has got to be some notion of ‘continuous coverage’ or some cost to ‘non-participation.’ We need a risk pool that’s not going to go into a death spiral. And I think it’s also very important that we have benefits that remain focused on prevention and primary care. We know those are effective. It’s no accident that the United States Preventive Services Task Force —an independent panel of experts in primary care and prevention that systematically reviews the evidence of effectiveness and develops recommendations for clinical preventive services — has endorsed these things. It’s been going on for decades. It’s not something new, under the ACA.
MB: What are your thoughts about The Patient Freedom Act of 2017?
KL: It certainly has a number of important attributes that should be contained in any reasonable way forward:
- A means of growing the risk pool — appealing to a broader base of covered lives is essential to the health of a market. The Collins-Cassidy proposal includes an auto-enrollment provision that at least provides a base level of coverage. The breadth of the risk pool is important for spreading the costs, reducing the cost shift, and encouraging appropriate utilization that can lower total costs of care over time.
- Installing a meaningful continuous coverage requirement that is a better inducement to market participation than what is contained within the AHCA.
- Allowing for coverage expansions for low-income populations. The bill anticipates the ability for states to maintain or introduce Medicaid expansion, either directly or through a melding of those funds and premium subsidies for the individual market. The approach suggests less of a division along the spectrum of income from Medicaid expansion to the subsidized marketplace, which can help ease the dislocation of coverage in the natural churn from one category to another.
- Giving states an ability to tailor their approach to the relevant needs on the ground, a nod to the laboratories of innovation that states can be at times.
- A funding structure that is responsible and sufficient to support the coverage needs and goals of the legislation.
MB: The high-risk pool is obviously a huge question. A key element of whether it can work on a national scale is whether it’s fully funded. It's my understanding that in the AHCA, it's not, and that will pose significant problems for insurers, hospitals and the general public. Can you comment on the relationship of full funding to the key question of whether a high-risk pool will work on a national level?
KL: They necessarily go hand in hand — one has to have sufficient funding of a high risk pool for it to work.
MB: I believe Maine has been cited recently as having done something innovative that might be a model for the ACA replacement.
KL: Are you thinking about the risk pools? This goes back to the Maine Guaranteed Access Reinsurance Association, or MGARA. That was in place in 2012-2013, before it was put in abeyance in light of the transitional reinsurance of the ACA. Now that the ACA’s transitional reinsurance program sunset at the end of 2016, there is renewed interest in some sort of state reinsurance effort and reviving MGARA at some point in the future, possibly in concert with a waiver that would maximize the benefits of reinsurance on premiums in the context of advanced premium tax credits. The question mark is: What’s the ultimate framework that we’re working with?
There is value in looking at how MGARA worked as an invisible risk pool in 2012-13 and how it could be applied now that the individual market has grown three times.
MB: So, recognizing it’s immensely complex, it’s in flux, what do you think are the key points that our business audience should keep their eye on as the ACA 'repeal and replace' efforts continue to unfold in Washington?
KL: Well, I think the cost-sharing reduction payments and how that all resolves eventually is an important near-term barometer.
Also important is the nature of premium supports under repeal and replace efforts. Will advanced premium tax credits be replaced with refundable tax credits, which are of much less value to those most in need of premium supports? If it’s refundable and it’s only at $2,000 to $4,000 depending on age, how much of the individual marketplace will go without coverage, particularly because there’s no effective mandate being applied?
Then, the size of the market: What is going to be the size of the individual market, and what does that mean for businesses and what does that mean for providers? While much of the focus is on a small segment of the market, the impacts are more widespread. Cost shifting and the impact of reduced rates of coverage affect everyone.
And while the small group market isn’t really front and center in this debate, it has to be of concern as well in making sure the small group market remains stable.
MB: That would be the small companies, those with fewer than 50 employees?
KL: Yes.
MB: Is the ACA SHOP program a part of that?
KL: SHOP is a small part of it. We have less than 5% of our small group business on SHOP. It’s mostly all ‘off-exchange.’ What’s driving the concern is the total cost of care and how we contain costs and ensure that we are not eating our ‘seed corn’ of the economy.
MB: What’s your worst fear of how this 'repeal and replace' effort might unfold politically?
KL: Well, I think losing the opportunity of coverage and having the market shrink would be a real loss for the tens of thousands of people in Maine that depend on that coverage today. I think it would also have a cascading effect. It impacts providers, hospitals, employers and the overall economy. It has an impact many times greater than the percentage of the population that’s directly impacted.
We’ve had some bumps and bruises — and we’ve certainly had our own bumps and bruises as a company — but I think we’ve learned a great deal and we have an opportunity to apply this learning in a way that makes us better.
MB: Is it fair to say that ‘trust’ needs to be introduced on the political level?
KL: Oh, that would be ideal. Trust is essential to achieving improved results that I think everyone can agree upon: lower total costs of care for improved health outcomes.
MB: Earlier this year, Sen. Collins stated that what she wants to achieve in the Senate is a plan that actually provides more health care coverage than the ACA, not less. That’s probably a challenging goal. Is that what you would hope for as well?
KL: I think there are plenty of issues with the ACA that need to be addressed. The concern is: Let’s not throw out what works while addressing the failings.
Here's the schedule of what's already run, and what's in store for the week ahead
Monday: Getting through a challenging year
Tuesday: Helping people improve their health
Wednesday: 'Repeal and replace' driving uncertainty about key Obamacare provisions
Thursday: Thoughts on Sen. Susan Collins' co-sponsored replacement bill
Friday: What lies ahead for CHO?
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