Gridlocked Healthcare Legislation Needs a Bypass

In Perspectives by Joe SullivanLeave a Comment

It’s abundantly clear the Trumpcare bill that was hooked or crooked through the House earlier this month is going nowhere in the Senate. It’s also pretty clear that if, and when, the Senate approves a health care bill, it won’t—nay, can’t—include key provisions that were tacked onto the House bill at the eleventh hour in order to corral just enough votes to squeak it through.

Foremost among these are waivers of two cornerstones of the Affordable Care Act. One is its prohibition against denying coverage or hiking premiums of people with preexisting conditions. The other is its prescription of Essential Health Benefits that all insurance plans must provide (except those that were grandfathered by the act).

To understand why the House-passed bill’s allowance for states to waive these standards doesn’t pass muster in the Senate requires delving into arcane Senate rules. Under these rules, provisions that qualify as budget “reconciliation” measures can be adopted by a simple majority vote rather than the 60 votes otherwise needed to overcome almost certain opposition by the Senate’s 48 Democrats. Any provision of a bill fails to qualify “if it does not produce a change in outlays or revenues…{or a change} which is merely incidental to the non-budgetary components of the provision.”

While the Senate parliamentarian who is the arbiter of these determinations has yet to rule, it seems clear to most observers that the preexisting condition and EHP waivers won’t qualify. And if the Senate were to approve a bill that excludes them, it’s deemed unlikely that the House would go along. So the probable result for the foreseeable future is legislative gridlock.

Yet time is of the essence in fixing the problems that have led to an erosion of insurer participation on the exchanges that provide coverage to more than 10 million individuals. Most of them are at income levels that qualify for premium tax credits and the majority for outright subsidization of deductibles, both of which can only be obtained via the exchanges.

By September at the latest, insurers must give notice whether they intend to offer exchange coverage in 2018 and submit their premiums for state approval prior to an annual enrollment period that begins in November. In all too many places, there’s doubt whether any coverage, let alone a competitive choice of carriers will remain. (With Blue Cross’ recent announcement of its intent to resume coverage here, Knoxville is fortunately no longer on the prospective void list.)

Instead of acting to avert a debacle, most Republicans from Donald Trump on down have been gloating over the plight of the exchanges as proof of the “failure of Obamacare.” There’s no denying that the exchanges have attracted an older, sicker, and hence costlier mix of enrollees than anticipated as droves of younger, healthier people have spurned the law’s mandate to get insured. Even with double-digit increases in premiums in each of the past two years, many of the dwindling number of insurers have continued to lose money. And, along with adverse selection, uncertainty about the future of the ground rules has also contributed to the exodus. Tennessee’s insurance commissioner, Julie Mix McPeak, has expressed extreme frustration over her inability to get any clarity from anyone in Washington in this regard.

Yet for all its dark clouds, Trumpcare also contains some silver linings. The House-passed bill provides for creation of a “Patient and State Stability Fund,” which would allocate $15 billion to the states in each of 2018 and 2019 and then $10 billion a year through 2026. States could deploy the money in a variety of ways, but the imperatives are “to help stabilize premiums for health insurance coverage in the individual market” and “reducing the cost of health insurance coverage … to individuals who have or are projected to have a high rate of utilization of health services.”

The word “reinsurance” doesn’t appear as such, but the implementation could bear a lot of resemblance to the reinsurance provisions of the ACA that the Republican-controlled Congress allowed to lapse after 2016. These provided for federal reimbursement to insurers of a portion of the amount by which any individual’s claims in a year exceeded $90,000. The lapse of these reimbursements is yet another reason why insurers have been pulling out of the exchanges. (In Iowa, where the exodus of the last remaining carrier appears imminent, it’s been widely reported that a single claimant’s cost of care has been running $1,000,000 a month for an extended period.)

Topping a list of health care legislative goals recently espoused by Sen. Lamar Alexander is “rescuing thousands of Tennesseans and millions of Americans who will be trapped in collapsing Affordable Care Act exchanges with few or even zero options for health insurance in 2018 unless Congress acts.”

About the only form of action I can imagine that seems realistic in this time frame is enactment of the Patient and State Stability Fund, which should get bipartisan support in both the Senate and the House.

Columnist

Joe Sullivan is the former owner and publisher of Metro Pulse (1992-2003) as well as a longtime columnist covering local politics, education, development, business, and tennis. His new column, Perspectives, covers much of the same terrain.

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