Policy

Insurers Face Exchange Deadlines and Senate Repeal Uncertainty

Senate Majority Leader Mitch McConnell intends to vote on a health care measure this week, but he might lack the votes for passage. (Bill Clark/CQ Roll Call File Photo)

Insurance companies are on edge as they await resolution on a Republican bill to replace the 2010 health care law at the same time that they are about to finalize contracts for the individual markets next year.

A Hail Mary effort from GOP Sens. Bill Cassidy of Louisiana and Lindsey Graham of South Carolina revived the party’s effort to fulfill their seven-year campaign promise to repeal the law in the final week before the opportunity to pass the measure with a simple majority expires on Sat., Sept. 30. The deadline for insurers to sign contracts is Wednesday.

The move could undermine participation and affect rates. Premiums are increasing by double digits again in many places this year, but the range is broad. In New York, average rate hikes range between 4.4 percent and 31.5 percent. In Maryland, they range from 0.2 percent to 15.9 percent. South Carolina’s only exchange insurer, BlueCross BlueShield, is increasing rates an average of 31.3 percent. Tennessee will see hikes between 21.4 percent and 36.5 percent.

Companies are partly blaming actions by Republicans and the Trump administration for the latest round of steep hikes, increasing rates 20 percent higher than they would have otherwise. Tennessee Insurance Commissioner Julie Mix McPeak approved rates hedging against potential adverse actions from Congress and President Donald Trump, saying the hikes “are far higher than could be necessary as a result of uncertainty in Washington.”

State officials around the country have had to employ a variety of creative solutions to keep health plans in the markets as the debate in Washington ping-pongs between different factions of the Republican Party. A number of states allowed insurers to file two separate sets of rates, based on whether or not the Trump administration decides to continue funding crucial cost-sharing subsidies.

Covered California Executive Director Peter Lee is also allowing insurers to recoup any losses arising from uncertainty through future rate hikes. In Oregon, the state legislature authorized a reinsurance program to help cushion the impact of high-cost enrollees, reducing individual premiums by 6 percent — final rates range from a 1.6 percent decrease to a 14 percent increase.

“They continue to pull their hair out,” said Robert Laszewski, a Blues plan consultant and founder of Health Policy and Strategy Associates. He noted that the continued debate likely won’t have immediate effects on rates, considering that plans have baked in uncertainty surrounding the subsidies as well as the mandate that most individuals buy insurance. But that doesn’t mean there won’t be a “surprise announcement” or two before Wednesday, he added.

The Graham-Cassidy proposal, as it is known, would convert Medicaid expansion and exchange funding into block grants, which would result in sharp cuts to many states. All of the industry’s major trade groups — America’s Health Insurance Plans, the Blue Cross Blue Shield Association, the Alliance of Community Health Plans and the Association for Community-Affiliated Plans — oppose the measure.

Senate Majority Leader Mitch McConnell, R-Ky., is aiming for a vote this week, but Sen. John McCain, R-Ariz., announced his opposition to the bill Friday and the measure has attracted skepticism from moderates and conservatives in the GOP conference.

“This is obviously a huge game changer,” Laszewski said. “I think the real question is going to be 2019 now. If Graham-Cassidy passes — and that’s a big ‘if’ OK, I don’t know that it will — we have a very different situation for 2019 because it’s the last year of Obamacare.”

Two years is not enough to launch a new health care system, either, as the bill provides, he added.

“It took four years for Obamacare to go and then it blew up on the pad.”

Pennsylvania is delaying its rate announcement until October in an attempt to avoid the confusion of having to reconfigure premiums based on Washington’s actions. A number of other states don’t plan on unveiling their rates until October. In July, Pennsylvania’s then-Insurance Commissioner Teresa Miller sent a sharply worded letter to Health and Human Services Secretary Tom Price, asking him to not let the state “bear the cost of your indecision.”

“I know you may believe Obamacare is failing,” Miller, now the acting secretary of human services, wrote. “In Pennsylvania, it is not failing on its own. If our market fails, it is because of your actions, and its failure will rest squarely on your shoulders.”

The critical factor for plans is the cost-sharing subsidies, but the guesswork is also untenable. Ceci Connolly, president and CEO of Alliance of Community Health Plans, said plans are “down to the two-yard line” on figuring out their plans for next year.

“I think it’s pretty clear that trying to do a massive overhaul of the health care system in a matter of days is not only impractical, but you’re risking the lives of Americans,” she said.

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