Lawmakers Eye Bipartisan ACA Fixes, Individual Market Stabilization

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Lawmakers Eye Bipartisan ACA Fixes, Individual Market Stabilization
Calendar07 September 2017

Following Congress’ failure to overhaul the Affordable Care Act (ACA) and return from its August recess, a Senate committee is holding a series of hearings to discuss potential bipartisan reforms to stabilize the Affordable Care Act markets. Health, Education, Labor and Pension (HELP) Committee Chairman Lamar Alexander, R-TN, and ranking member Patty Murray, D-WA, are hopeful the committee can put together a modest package of reforms before the end of the month, though the outlook is unclear.

On Sept. 6, the HELP committee heard from five state insurance commissioners who recommended reforms that could garner bipartisan support, including continued funding for the ACA’s cost-sharing reduction payments, state and federal reinsurance mechanisms, and new flexibility for state “Section 1332” waivers. In addition to testifying before the committee, Chairman Alexander noted that the commissioners met with 31 other senators prior to the hearing.

Separately, a bipartisan coalition of governors, led by John Kasich, R-OH, and John Hickenlooper, D-CO, released an open letter to congressional leaders calling for a package of reforms, including several provisions promoted by the National Association of Insurance Commissioners. Governor Hickenlooper and other governors called for many of the same reforms outlined in the joint letter at a Sept. 7 HELP Committee hearing. These include fixing the “family glitch” that prevents some individuals who cannot afford employer coverage from enrolling in a subsidized ACA exchange plan, greater flexibility for states to pursue their own reforms, and greater use of value-based purchasing models to reward more cost-effective care.

Meanwhile, some Republicans -- backed by the Trump administration -- are trying to revive the ACA repeal effort before “reconciliation” rules allowing a bill to pass the Senate with a simple majority expires on Sept. 30. Sens. Bill Cassidy, R-LA, and Lindsey Graham, R-SC, are developing legislation that would give states block grants to implement their own health care reforms. A small group of House Republicans are backing a similar approach that would also apply the ACA’s employer play-or-pay rules only to companies with more than 500 employees. But these efforts face long odds amid continuing policy differences among Republicans and a crowded legislative calendar.

Fiscal complications aside, there is broad bipartisan support for repealing the ACA’s “Cadillac tax,” however, and Mercer’s Tracy Watts helped make the case at an Aug. 30 meeting with White House officials. Working with the American Benefits Council and the Alliance to Fight the 40/Don't Tax My Health Care, Watts shared Mercer’s actuarial analyses (LINK) of how the tax and a proposal to cap the employee tax exclusion for employer-provided coverage would adversely affect employers and employees. These issues may be addressed as part of Republican tax reform efforts even though House GOP leaders say they would prefer to address the ACA’s taxes separately.

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