Coffee CAHC is a twice-weekly newsletter where we round up and comment on the latest health coverage policy developments both nationally and here in Maine. We hope you find these updates helpful!
115th Congress, 1st session
128th Maine Legislature, adjourned
Friday, August 11, 2017
We took a little break from the Wednesday edition of Coffee CAHC this week, and I think we may continue to do so through the end of August. The “breaking news!” pace of developments on the health policy front has certainly slowed down while Congress is on recess and the Legislature is adjourned, so for the next few weeks you can probably expect to see a single “meaty” Coffee CAHC on Friday, rather than two anemic ones. But, hey, ya never know in this world, so if something significant shifts, don’t be too surprised if you see a mid-week edition coming at you!
Through August, I’ll be reminding y’all that the fifth annual Health Care for Maine conference will be taking place on Tuesday, September 26th at the Augusta Civic Center. This year’s conference theme is “The Future of Health Care in Maine: Defending Our Gains, Defining Our Vision”. I’m thrilled to say that Mila Kofman, former Superintendent of the Maine Bureau of Insurance and current executive director of the DC Health Benefits Exchange, will be delivering our keynote. You can register here. Early bird discount only lasts through August, so sign up today!
There are, in my mind, two big questions swirling around the federal health policy landscape at the moment. 1) What is the Trump Administration going to do about CSR reimbursements? And 2) What is Congress going to do, and how quickly are they going to do it, when they get back in September?
On the first question, I’d say it’s anybody’s guess at this point. Every month, it seems, the Administration flirts with terminating the payments, only to grudgingly pay them when it comes time to “cut the check”, so to speak. Will this month be any different? We’ll find out soon, but one thing seems certain: if the Administration summarily terminates the CSR reimbursements, expect to see an immediate reaction by insurers ditching the exchanges next year, as many have pledged to do if CSR reimbursements cease.
That leads straight into what Congress will do, and how quickly, in September. There is broad agreement that appropriating the CSR reimbursements is an absolutely essential near-term step, but the question is whether or not Congress can pull that off before it’s too late. Right now, insurers have to make their final decisions on whether to participate in the exchanges by the end of September. Congress would have to act very, very quickly to get things in place to prevent a mass exodus.
What else might Congress look at doing? A new proposal put forward by a bipartisan group of “who’s who” in health policy on both sides of the aisle has some ideas, most of which are familiar to anybody who has been following this debate. A key concept in that report, which keeps coming up in other circles, is pumping some significant resources into some sort of “stabilization” fund that states will be able to access to help shore up their markets, both in terms of attracting or retaining insurers to sell on the exchanges and to keep premiums in check.
One seemingly popular idea of how to do that at the moment is our old friend “reinsurance”. Alaska and Minnesota have been the two states to watch on this front: both proposed 1332 “innovation” waivers to CMS to institute reinsurance programs in their state, and both proposals caused insurers in those states to project dramatically lower premium increases – or even significant premium decreases – if the waiver was approved, as it now has been in Alaska (Minnesota’s application, as far as I know, is still pending).
So, Congress: ball’s in your court. There are effective actions you can take to stabilize the markets short-term. And as a new report from Kaiser Family Foundation points out, Congress, you’d basically be undoing damage you and the Trump administration have caused by messing around with repeal-and-replace bills all year.
Yesterday, Superintendent Eric Cioppa of the Maine Bureau of Insurance released his decisions on the 2018 rate increases that were requested by the three individual market insurance carriers in Maine.
If you want some light reading, you can check out the decisions in full here (fair warning that each of these links goes to a PDF file): Anthem, Harvard Pilgrim, and Community Health Options. Or, if you want a simpler recap, the Portland Press Herald has you covered (fair warning that yours truly is quoted in the PPH article).
It’s notable that, while Superintendent Cioppa did approve significant rate increases for all three carriers, he did not allow the full amounts that any of them requested. And – as we flagged in our comments at all three rate hearings – a key factor in his decision to reject the full increases was that all three carriers were making overly pessimistic assumptions about what the individual market in Maine will look like next year.
If there’s one thing to remember as you’re chewing on what these rate increases mean, it’s this: consumers who receive tax credits are insulated from premium increases. Let me repeat that: consumers in Maine who receive tax credits through the Marketplace are insulated from premium increases. That’s because the tax credits are calculated to make sure that the premiums for a certain plan (the 2nd-lowest-cost silver plan) in your region will never cost more than a certain percentage of your actual income. In other words, once you’re paying, say, 8% of your income in premiums, the tax credits pick up the rest of the tab, whether your premiums at that point are $100 a month or $10,000 a month. These increases will impact how much the feds pay out in tax credits, but consumers who receive tax credits are protected. In Maine, 86% of consumers receive tax credits.
But, for anybody who doesn’t get a tax credit (anybody over 400% of the federal poverty limit, who doesn’t qualify at all, or – in Maine, because we haven’t expanded Medicaid, anybody below 100% of the federal poverty limit)? They’ll be feeling the full brunt of these hikes. There’s no sugarcoating that.*
The next step in the rate review process rests with CMS at the federal level, who will be reviewing these rates and the proposed plan designs over the next few weeks before giving final approval for the exchange products next year. We’ll keep you posted on that process as it moves forward.
*In fact, part of the appeal of a reinsurance program like what I mentioned in the “national level” section above is that it has a calming effect on premiums across the board, not only for those consumers who receive tax credits or subsidies.
Would you like to know more?
Brookings has a very readable, very informative blog post outlining possible federal policies that could help ease the situation of “surprise medical bills”. It’s particularly interesting here in Maine since we took a huge step forward this year in putting a stop to these surprise bills.
Until next time, friends, I remain,