The House Committee on Energy and Commerce, Subcommittee on Health, held a hearing on four bills designed to improve the health insurance markets, established under section 1301 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), and to ensure taxpayer dollars are only spent on those eligible for assistance. The first three bills were introduced in the last Congress and are aimed at improving the functioning of the insurance markets through reforms to special enrollment periods (SEPs), grace periods, and age rating. The fourth bill is newly introduced and is designed to ensure that patients with pre-existing conditions will always have access to coverage and care.
The bills before the subcommittee can be summarized as follows:
- H.R. 706, Plan Verification and Fairness Act of 2017. Introduced by Rep. Marsha Blackburn (R-Tenn.), this bill would require patients who seek enrollment outside of the open enrollment period (OEP) (i.e., using a SEP) to provide pre-enrollment verification to the exchange before the plan takes effect. The bill would also require the Inspector General of HHS to conduct a study to better understand the number of individuals who seek enrollment using SEPs.
- H.R. 710, Health Coverage State Flexibility Act of 2017. Introduced by Rep. Bill Flores (R-Tex.), this bill would align grace periods (currently 90 days under the ACA) with the grace period a state allowed in its individual market prior to the enactment of the ACA or one month. Currently, ACA plans cannot discontinue coverage for nonpayment of premiums. This means that patients receiving the advance premium tax credits and cost-sharing reductions can pay for only a few months of health insurance, but receive a full year of coverage. This bill would decrease gaming by these individuals who do not pay their premiums and reenroll during the following OEP.
- H.R. 708, State Age Rating Flexibility Act of 2017. Before the ACA, many states were using a 5:1 age rating ratio, meaning that the most generous plan could cost five times more than the least generous plan when it came to a patient’s age. The ACA moved this ratio to 3:1 for all states, regardless of their unique patient needs or circumstances. Understanding that the federal and state exchange instability is largely the result of a lack of young, healthy enrollees, and with the true cost of health care for the average 64-year-old roughly 4.8 times higher than the average 21-year-old, Rep. Larry Bucshon, M.D. (R-Ind.) introduced a bill that would place age rating at a standard 5:1 ratio across the country, but give states the flexibility to widen or loosen this formula.
- Pre-Existing Condition Protection and Continuous Coverage Incentive Act of 2017. This discussion draft, offered by Chairman Greg Walden (R-Ore.), is based on H.R. 5328 from the 113th Congress, then-entitled "Guaranteed Health Coverage for Pre-Existing Conditions Act of 2014." The legislation aims to maintain important pre-existing conditions safeguards following the repeal of ACA. The draft bill includes a placeholder for language that will offer new patient protection in the individual and small group markets for maintaining continuous health care coverage. This placeholder language will be designed to incentivize individuals to maintain coverage and reduce adverse selection and risk pool imbalances.
Subcommittee Chairman Walden’s introductory statement outlined the subcommittee’s current concerns with the ACA as follows:
- Patients in 21 states have seen average premium increases of 25 percent or more in 2017.
- Seven states will experience premium increases of 50 percent or more in 2017.
- In 2016, 225 counties had one insurer. This year, there are 1,022 counties with just one insurer – one-third of the entire country.
- Five entire states just have one insurer offering coverage on the exchange.
- Only five of the original 23 health insurance CO-OPs remain in business.
The subcommittee heard from the following witnesses: Doug Holtz-Eakin, President, American Action Forum; J.P. Wieske, Deputy Commissioner of Insurance, State of Wisconsin; and J. Leonard Lichtenfeld, M.D., Deputy Chief Medical Officer, American Cancer Society.
Eakin. In his testimony, Eakin conveyed the following points:
- Doing nothing is not an option. The ACA is in a downward spiral. Prices will continue to rise and insurers will continue to leave unless significant changes are made.
- These reforms (contained in the four proposed bills) are good policy regardless of the performance of the markets or the political climate. They should receive bipartisan support.
- While the proposed changes will help, they will not be enough to produce a vibrant individual market. More will need be done to stabilize the market until a replacement plan can be fully implemented.
Wieske. Wieske testified that Wisconsin had a well-functioning health insurance market prior to the passage of the ACA. It had competitive individual and small group markets with numerous choices, including co-ops, health maintenance organizations (HMOs), not-for-profit plans, and traditional health insurance options. For consumers who could not meet the underwriting requirements of private coverage, Wisconsin offered a high-risk pool which provided relatively affordable health insurance coverage while offering a choice of plan designs, and provided subsidies for those with family incomes up to $34,000.
According to Wieske, since the ACA was implemented, the Wisconsin consumer has fewer choices, rates have increased significantly, a number of its insurers have seen a significant loss in capital, insurers have left the individual market, and those that remain have reduced service areas and plan offerings. In the long run, he believes that the ACA market is not sustainable. He believes that health insurance should be primarily regulated at the state level and states should have the ability to determine what is best for their market. He pointed out that: "A return to the states does not mean an unregulated health insurance market. Indeed, the ACA includes many standards that were first implemented at the state level."
Lichtenfeld. Lichtenfeld testified that the four bills before the committee "appear to work together to address concerns expressed by the insurance industry about the viability of the individual and small group markets." And while he recognized the importance of strengthening the health insurance markets, he expressed concern about how these bills might impact care and access to adequate and affordable coverage for individuals with cancer.
He stated, on behalf of the American Cancer Society, that any legislative changes should be grounded in the following principles to ensure that cancer patients have access to the care they need for their cancer treatment:
- Protecting patients. The patient protections contained in ACA should be retained, including the prohibition on pre-existing condition exclusions, the prohibition on annual and lifetime limits, the maximum out-of-pocket limits, and the prohibition on insurance policy rescissions.
- Comprehensive coverage. Insurance should cover the major health needs of cancer patients and survivors, including hospitalization, specialty cancer care, physician services, prescription drugs, rehabilitative care, and mental health services.
- Affordable coverage. Affordable premiums and cost-sharing (including deductibles, copays and coinsurance) should be retained to ensure that persons with cancer and survivors can buy and maintain insurance coverage.
- Equitable coverage. Changes should guarantee that people at all income levels have access to an affordable and consistent standard of coverage in every state.
- Preventive care. Preventive care coverage should be maintained as a substantial number of all cancer deaths can be prevented and the substantial cost of the treatment of advanced disease can be reduced through the use of existing evidence-based prevention and early detection strategies.
Future subcommittee actions. Next week, the subcommittee has plans to take up legislation sponsored by Rep. Gus Bilirakis (R-Fla.) and Rep. Kurt Schrader (D-Ore.) that would incentivize generic drug development and increase competition in the market. H.R. 749, entitled "To increase competition in the pharmaceutical industry," introduced on January 30, 2017, would require the FDA to prioritize and expedite the review of generic applications for drug products that are currently in shortage or where there are few manufacturers on the market. The bill would also increase transparency around the current generic backlog at the FDA.
Companies: American Action Forum; American Cancer Society
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