Senators Alexander and Collins as well as Reps Walden and Costello (all Republicans) released their ACA stabilization bill. This will be an ongoing first read:
The naming convention starts at Title 6.
Section 601 is a naming section.
Section 602 is a revision of the Section 1332 waivers.
So far this looks to be a close textual grab from Alexander-Murray. The governor shall have the power to apply for a 1332 waiver without needing state legislature buy-in. The state legislature can block the governor but does not need to pass a law to pursue a 1332 as the current system is set up.
Section 602-2-A-bb solves the Minnesota Basic Health Plan 1332 problem. As a reminder when Minnesota applied for reinsurance, the lower index premium whacked the funding for their Basic Health Plan (Section 1331).
Section 602-2-(4) is a reinsurance or high risk pool program run through the 1332 process.
There is serious money involved. $5 billion for Fiscal Year 18, and then $10 billion per year for FY-19,20, and 21.
That should be enough to knock down premiums by roughly 10% against the current counter-factual. I am slightly confused as to why there is FY18 reinsurance money as by the time the program is set up and the first application is in the door there might only by four months of FY-18 left and premiums won’t change. This is just odd to me, as if they are willing to drop $35 billion on reinsurance between now and 9/30/21 I would have expected the money to flow when it could influence future premiums.
Section 602-3 is a rewrite of the 1332 guidelines that would allow the Iowa Stopgap Plan’s final revision to be allowed. This is pretty close to the language that was agreed upon last September.
There is a big little change. The budget neutrality provision would now be a 10 year window instead of a year by year budget neutrality requirement. If a state thinks that it can bend the cost curve with an upfront investment, it can now use federal funds via a 1332 to do so. This is a good idea. Another change from Alexander Murray’s language from September. 1332 waivers are to be approved in 120 days instead of 180. A-M had a 90 day timeline. The actuaries will thank Congress for that month.
Waivers are to be good for no more than 6 years (same as A-M). Language change from A-M, the Sec. of HHS may pull a waiver if a state materially fails to comply with the waiver. If waiver funds are spent on hookers and blow, the waiver can be cancelled.
UPDATE Hyde language is in 602-C and 602-D.
Part G is the invisible risk sharing segment. It can either be through insurers ceding premiums and risk or through reinsurance. This makes sense to me.
Now here is the big deal.
The Cost Sharing Reduction (CSR) would be funded from October 1, 2017 to
September 30 December 31, 2021. Any insurer that Silver loaded in 2018 won’t get 2018 CSR payments. This is going to be the major fight as the reinsurance funds put $35 billion into the ACA and this change will pull out at least as much money.
Section 603 is opening up Catastrophic plans while renaming them Copper plans. The intent is to offer lower cost plans to more people. Catastrophic plans have a premium advantage over actuarially value similar Bronze plans because current Catastrophic plans are risk-adjusted only against other Catastrophic plans in a state while Bronze plans are part of the Metal risk adjustment pool. Sec. 603 modifies Sec 1312 which implies that the new Copper plans are to be part of the Metal risk adjustment process which to me says most of the pricing advantage of the current catastrophic plans disappears.
Section 604 explicitly calls for $105 million in outreach spending of which some may be contracted back out to the states. More reporting is also called for.
Section 605: Congress tells CMS to get their ass in gear and issue the regulations needed to operationalize Section 1333 the interstate compacts that could allow for sales across state lines.
Section 606: Consumer warning that Short Term Plans are very lightly regulated.
Update 2 Seems that 606 greatly restricts states ability to regulate short term plans.
Okay, everything but the Hyde Language AND CSR fundingfor 2019-2021
and Short Term plan limits should easily pass. Funding CSR in 2019-2021 pulls a lot of money out of the ACA individual market. That is going to be the fight.