This week, our In Focus section reviews the bipartisan health deal reached by Senators Patty Murray (D-WA) and Lamar Alexander (R-TN), both members of the Senate’s Health, Education, Labor, & Pensions (HELP) Committee. Bipartisan talks around a bill to stabilize insurance markets have been ongoing for months, with discussions resuming after the Senate pulled a vote on the Graham-Cassidy reform bill last month. The Murray-Alexander bill, for which a discussion draft has been circulated, seeks to stabilize insurance markets through several key actions around cost-sharing reduction (CSR) payments to insurers and Section 1332 waivers, as well as several additional provisions. Below, we provide a summary of the key provisions as they stand.
Cost-Sharing Reduction Payments
Under the Affordable Care Act (ACA), qualifying Exchange plans are eligible to receive CSR payments, which are made to the insurers to reduce out-of-pocket costs, including deductibles, copayments, and coinsurance, to beneficiaries. Enrollees with incomes at or below 250 percent of the federal poverty level who purchase a Silver plan on the Exchange are eligible for CSR payments. Late last week, President Donald Trump signed an executive order to immediately terminate CSR payments to insurers, a move many insurers had anticipated, but that is at least partially driving increased premiums and lower insurer participation for 2018. Federal outlays for CSR payments are roughly $7 billion a year. The Murray-Alexander agreement would fund CSR payments for the remainder of 2017, as well as for 2018 and 2019. This provision is aimed at providing pricing stability for Exchange insurers, as well as encourage insurers to remain in Exchange markets for the next two years.
Section 1332 Waivers
The ACA provided for states to apply for Section 1332 waivers to waive certain provisions of the law and implement insurance market innovations. The Murray-Alexander bill would make several changes to the Section 1332 waiver process to allow for greater state flexibility and expedited review and approval. The bill modifies language around affordability and budget neutrality, allowing for coverage that is “comparable” in affordability, rather than “as affordable as” coverage absent the waiver. Additionally, states may use the entire life of the 1332 waiver, which would be extended from five to six years under the bill, to calculate budget neutrality. Further, the Murray-Alexander bill would cut the Centers for Medicare & Medicaid Services (CMS) review time of 1332 waiver proposals in half, from 180 days to 90 days, as well as provide an expedited 45-day review option. Finally, the bill allows for automatic approval of waivers that have previously been approved.
Authorization of Funding for State Reinsurance Programs
The Murray-Alexander bill would authorize funding for state-initiated reinsurance programs; however, it does not provide funding for the programs, except if excess savings are generated under the bill. Alaska received approval this summer to establish a state-based reinsurance program under a 1332 waiver.
Expanded Access to High-Deductible Exchange Plans
Under current law, enrollment in high-deductible “catastrophic” coverage plans on the Exchange is limited to individuals age 30 or younger. The Murray-Alexander bill would expand enrollment in these plans, which are not eligible for Exchange subsidies, to individuals of any age.
Enrollment Outreach Funding
The Murray-Alexander bill would restore funding that had been pulled by the Trump Administration for enrollment outreach. The funds will be distributed to states, but would be returned to the federal government for enrollment outreach purposes if not fully used by the state.
Interstate Compact Regulations
The ACA established an option for interstate compacts, allowing insurance to be sold across state lines, but as of yet, no regulations have been issued by CMS. The Murray-Alexander bill would require CMS to publish regulations and guidance around this option for states.