Top takeaways from the week: 1) Senators continue to meet on ACA repeal and replacement efforts, 2) the Senate working group has begun to discuss advancing certain short-term market stabilization policies prior to a longer-term replacement package, and 3) a group of bipartisan Senate moderates met to discuss a bipartisan path forward. 

Senate Action –

The Senate working group led by Majority Leader McConnell (R-KY) began discussions this week on short-term efforts to stabilize the health care marketplaces before a longer-term reform package can be finalized. Many insurers participating in state-based marketplaces have already had to submit their rates; the rate filings show that insurers are either pulling back from the markets or substantially increasing their rates due in part to instability caused by reform conversations and the lack of a commitment on cost-sharing reduction (CSR) payments from either Congress or the Administration. Insurers must also decide by June 21 whether to participate in the 34 federally-facilitated marketplaces. The timeline for a broad repeal and replace package is likely to go beyond that point, creating pressure on the Senate to take action in the short-term.

The working group discussed several options to help stabilize the marketplaces in 2018 and 2019 in meetings on Monday and today, including a bill introduced by Senate HELP Committee Chair Alexander (R-TN) and Sen. Corker (R-TN) which would allow individuals to use their federal subsidy to buy health plans not offered on an exchange in areas where there are no exchange plans available (S. 761). Sen. Portman (R-OH) said that the group has also discussed potential Congressional action to make sure insurers continue to receive CSR payments.

Such discussions are timely, given that today the Attorneys General of more than a dozen states filed a Motion to Intervene in the CSR case between the U.S. House of Representatives and the Administration. The Motion argues that the Administration is no longer representing their interests in the case and that the “immediate loss of CSR funding, with any future funding subject to the myriad uncertainties of the appropriations process, would harm millions of state residents and the states themselves.”  Additionally, the National Association of Insurance Commissioners (NAIC) sent a letter yesterday to Congressional Leaders urging them to ensure that CSR payments are fully funded in 2017 and 2018 and to provide sufficient market stabilization funding to states. NAIC also sent a letter to Office of Management and Budget (OMB) Director Mulvaney urging the Administration to continue full funding for CSR payments. NAIC Letters: http://bit.ly/2rwI0Aa and http://bit.ly/2rwMXJo

The working group has also continued to discuss the outlines of a longer-term repeal and replace package. Notably, Senate Finance Committee Chair Hatch (R-UT) said on Wednesday that he wouldn’t be opposed to delaying the repeal of the ACA’s individual mandate until after 2020, or possibly indefinitely. Other Senators have warmed to the idea of providing more generous subsidies to lower-income and older people than are available in the bill passed by the House.

One of the major sticking points in the discussions has been Medicaid, as Senators differ greatly in their support for the ACA’s expansion. Several compromise options have been proposed: Sen. Toomey (R-OH) has proposed to allow expansion funding to be phased out over five years, beginning in 2020, while Sen. Hoeven (R-ND) has suggested allowing states to bank some of their federal funding in years where spending falls under the federal caps, and allowing them to pull from that funding in later years.

Meanwhile, on Monday, Sens. Collins (R-ME) and Cassidy (R-LA) convened a group of moderate senators to discuss a potential bipartisan path forward on repeal and replacement efforts. In addition to Sens. Collins and Cassidy, the meeting included Sens. Heller (R-NV), Graham (R-SC), Sullivan (R-AK), Capito (R-WV), Manchin (D-WV), Donnelly (D-IN), and Heitkamp (D-ND), among others. Sens. Collins and Cassidy previously introduced the Patient Freedom Act (S. 191), which would give states the option to maintain the ACA’s provisions or to adopt certain market-based alternatives to the ACA.

Administrative Action –

On Monday, CMS announced it is ending the Federally-Facilitated Small Business Health Options Program (FF-SHOP), which established exchanges for small employers, citing low enrollment. Press release: http://go.cms.gov/2rrJZpE Guidance: http://go.cms.gov/2rroBRk

Yesterday, CMS announced that consumers in states using the Federally-facilitated Marketplace (FFM) applying for individual market coverage during the upcoming open enrollment period will be able to directly enroll through third-parties, rather than having to bounce between a third party entity and Healthcare.gov. The Administration noted that the change is intended to help increase enrollment. Press release: http://go.cms.gov/2rrzCSw Guidance: http://go.cms.gov/2rrmNYy