- CMS should continue to fund the cost-sharing reductions (CSRs) that keep the Affordable Care Act insurance marketplaces relatively stable, the American Hospital Association (AHA) said in a comment letter.
AHA asserts that should the government discontinue the funding, Americans making more than 400 percent of the federal poverty level (FPL) will be priced out of having coverage, even though subsidized consumers are protected from price increases. Without the CSRs, people are expected to face higher premium costs and fewer coverage options.
“Unless CMS funds the CSRs, consumers will have less choice in 2018 and face higher premiums for those plans that remain,” wrote AHA Executive Vice President Tom Nickels. “Uncertainty already has contributed to double-digit premium increases in some markets.”
AHA argues that without the CSRs in place, payers will lose between $7 to $10 billion annually in unreimbursed healthcare costs. As a result, payer losses may force them to either exit ACA marketplaces, reduce consumer options, and/or increase premium costs. Citing a Kaiser Permanente estimate, AHA says that uncertainty in CSR funding will force insurance premiums upward anywhere from 9 to 27 percent.
The AHA made additional recommendations, including the incentivization of enrollment, the building of a reinsurance program, evaluating the risk-adjustment program, phasing out transitional health plans, hastening state-level approaches to market stability, and retaining patient protections.
Enforce the individual mandate to improve risk pools
AHA believes that without an individual mandate for coverage, millions of healthier people would likely opt out of coverage. If this were to happen, risk pools would worsen because the highest-cost patients would be the majority consumers in the marketplaces.
“Indeed, insurers already are proposing higher rates as a result of uncertainty around whether the individual mandate will be enforced,” AHA said. “Covered California, California’s marketplace, estimated that failure to enforce the mandate could result in premium increases of more than 28 percent (and loss of coverage for 350,000 Californians).”
Expand federal outreach to improve enrollment rates
In order to acquire strong enrollment numbers that stabilize the insurance market, AHA suggested to CMS that they improve outreach and marketing efforts outside of contemporary enrollment navigation.
AHA said that prospective insurance consumers currently rely on outside brokers and agents to assess their coverage options and apply for health insurance. Because of changes such as the shortened enrollment period, AHA suggested that CMS devotes more resources to outreach efforts and enrollment support through wide-scale marketing and consultation services.
“We particularly encourage CMS to increase its investment in television, radio and other advertisements to increase consumer awareness, and to increase resources for in-person eligibility and enrollment assistance,” AHA said.
Attract insurer participation through a reinsurance program
AHA urged CMS to work with Congress to reinstitute a federally supported reinsurance program that provides financial protection to marketplace plans for unexpected high cost claims.
The previous program helped to lower premiums since it was funded by plans inside and outside the federal marketplaces. AHA believes reinsurance can entice more payers to participate and create more affordable coverage rates.
Alternatively, AHA encourages CMS to continue the support of state reinsurance programs and to finance these programs.
Continue refinement of the risk adjustment program
While AHA believes the risk adjustment program is helpful to ensuring reimbursement for health plans, the organization expressed concern that the program could unintentionally hurt smaller payers. To curb hesitation from smaller payers to join or stay in individual and small group markets, AHA recommended that CMS should continue to evaluate the risk-adjustment model to make sure that all payers are treated fairly.
Decrease the rate of transitional health plans offered
CMS has continued to extend the length of time that non-compliant ACA plans, or transitional health plans, can offer coverage. Earlier this year, CMS officially extended “grandfathered coverage” into 2018.
AHA argues that these transitions need to be properly phased out because of the problems they pose for healthy risk pools. Because non-compliant plans remove healthier individuals from these risk pools, costs for the remaining patients are likely to rise.
AHA believes CMS should phase out transitional coverage at the start of 2018, and bring in healthy individuals under ACA-compliant insurance.
Allow state-level approaches to market stabilization
States such as Alaska, Minnesota, and Hawaii are exploring new ways to stabilize their in-state insurance markets through 1332 waivers. Since states are pursuing new alternatives to market stabilization, and are requiring state Medicaid payers to sell a required amount of products, AHA believes CMS should expedite the process for state alternatives to market stabilization.
“We urge the agency to prioritize review of any state applications for innovative solutions, and encourage the agency to consider developing templates for common approaches that will help reduce the burden on states interested in pursuing such solutions,” AHA said.
Keep current protections on Essential Health Benefits (EHBs)
If these EHBs was to change, AHA argues that coverage would be meaningless for millions of Americans. Based on industry estimates, AHA believes any changes could make treatments and procedures unaffordable for millions, even if they fall in the deductible range for services.
AHA suggests that CMS should maintain and protect the current status of EHBs because they are a large safety net for consumers that end up having an unexpected, and potentially troublesome, health condition.
“Consumers often cannot assess what care they will need in a given year – an unexpected trauma, initial onset of a chronic condition, a cancer diagnosis – and, therefore, these minimum coverage standards offer important health and financial protections,” AHA said.