Top Takeaway from this week – (1) The Senate is moving towards a vote on tax reform, which includes a repeal of the ACA’s individual mandate; (2) Senator Collins has said leadership is committed to enacting two market stabilization bills by the end of the year; and (3) Enrollment in the federally-facilitated exchanges slowed in the fourth week of Open Enrollment, increasing concern that enrollment may be significantly lower this year.
Congressional Activity –
Yesterday, the Senate voted 52-48 to begin debate on the Tax Cuts and Jobs Act (S. 1), the Senate’s tax reform bill; the Senate is currently in the midst of 20 hours of debate on the bill before it is put to a vote. The Senate version of the bill differs from the House version, and includes a repeal of the ACA’s individual mandate. If the Senate passes the bill, the differences between the House and Senate versions will need to be resolved through conference. Bill text: http://bit.ly/2BnynIt
Senate leadership is in the process of making final adjustments to the bill and is working with hesitant Senators to ensure their support, including with Sen. Collins (R-ME).
In an interview with Politico on Tuesday, Sen. Collins (R-ME) noted that if the individual mandate is included in the tax bill, “it’s essential that we mitigate the impact on premiums. That includes passing the Alexander-Murray bill and also a bill that I have with Bill Nelson that would protect people with pre-existing conditions and yet lower premiums through the use of high risk pools.” The Alexander-Murray legislation would provide funding for cost-sharing reduction payments and would provide states with greater flexibility for section 1332 waivers; the Lower Premiums through Reinsurance Act (S. 1835) sponsored by Sens. Collins (R-ME) and Nelson (D-FL), would provide $2.25 billion in FY18 and FY19 to states to establish reinsurance programs or high-risk pools.
On Tuesday, Sen. Collins said she received a commitment from Senate GOP leadership to include both bills in an upcoming must-pass vehicle, noting, “I’m pushing to make sure that they are passed and signed into law prior to the conference report coming back on the tax bill, so I would know for certain that we’re going to be able to mitigate the impact of repeal on the individual mandate.”
At a GOP lunch on Tuesday, President Trump also indicated support for the two bipartisan bills, reversing his earlier position against the Alexander-Murray package as a “bailout” for insurance companies.
Sen. Murkowski (R-AK), who has also previously voted against ACA reform bills, has said that passage of the Alexander-Murray proposal is not a precondition to her support for tax reform; “I have consistently said that passing Alexander-Murray is important to stabilizing the individual market and it may be particularly so if the individual mandate is repealed as included in the draft is repealed…however, one should not assume that this is a precondition for my support for the tax bill.” Sen. McCain (R-AZ) also said today that he supports the tax reform bill.
However, despite early bipartisan support for both market stabilization bills, Democratic enthusiasm has waned as the bills have been paired with tax reform and the repeal of the individual mandate. Further complicating the issue, the Congressional Budget Office announced yesterday that the Alexander-Murray proposal would do nothing to mitigate the expected 10 percent increase in premiums or the loss of coverage caused by the repeal of the individual mandate. CBO letter: http://bit.ly/2BniB08
Additionally, it is uncertain that the House will pass either market stabilization bill. House Freedom Caucus Chair Meadows (R-NC) noted that he opposes Alexander-Murray as a bailout to insurance companies, and has raised doubts about the benefit of funding reinsurance pools. Former Freedom Caucus Chair Jordan (R-OH) noted, “We haven’t repealed ObamaCare, we haven’t cut taxes yet, and we haven’t started construction on the border security wall like we told the voters. But before we get any of that stuff done we’re going to bail out insurance companies in the spending bill? For me, I think probably largely for many of our members, that doesn’t make sense. I wouldn’t be supportive of that.”
Administrative Action –
On Monday, CMS released its annual draft letter to issuers planning to participate in the federally-facilitated exchange for plan year 2019. CMS also released a draft bulletin highlighting rate review submission requirements for qualified health plan certification for plan year 2019. The draft letter and bulletin do not propose any major changes to the marketplaces, but reiterate that the Administration will largely defer to states in reviewing provider networks. It also proposes to begin Open Enrollment on November 1, 2018. Fact sheet: http://go.cms.gov/2jvpq8v Draft letter: http://go.cms.gov/2hWKDb8 Draft bulletin: http://go.cms.gov/2hXuOkp Key dates: http://go.cms.gov/2hYnrcr
Yesterday, CMS released updated enrollment data for the second week of Open Enrollment, finding that over 504,000 people selected plans using Healthcare.gov, including over 152,000 new consumers, totaling nearly 2.8 million since the beginning of open enrollment. Press release: http://go.cms.gov/2Bpkf1b