So far in 2017, the vast majority of health care policy proposals, bills, and amendments have not had much input from progressives at the state or national level. Bills that generally have the goal of repealing and replacing the Affordable Care Act have followed a general blueprint of proposing legislation, holding as few hearings as possible, ignoring non-partisan or external analyses, and forcing a vote with many members of Congress having never read the bill. This process so far has proven to be enormously unpopular and substantively unsuccessful so far.
However, one bill proposed in the US Senate has genuine bipartisan support: the Bipartisan Health Care Stabilization Act of 2017 (more commonly known as the Alexander-Murray bill). This bill has two authors, Senators Lamar Alexander (R-TN) and Patty Murray (D-WA), and 22 additional co-sponsors that include 12 Republicans and 12 Democrats. This number is important if this bill is brought to a vote, as the having presumably 60 senators voting in favor of a bill could break an attempt to filibuster.
Given the popularity of this bill in the Senate (and the potential changes in the Senate tax bill to include repealing the individual mandate for health insurance), let’s take a quick look at what this bill would accomplish and impacts on Minnnesota’s health care system and funding. (Also keep in mind that the authors hoped to pass this bill before open enrollment this year, so some provisions might differ from a future draft).
The bill has five sections that are generally appealing to both sides of the aisle. The two biggest provisions are efforts to simplify and expedite the process for states to implement their own reforms through the 1332 waiver system, and the guaranteed continuation of cost-sharing reduction payments to health plans through 2019.
The 1332 waiver is a means for states to make changes to ACA implementation efforts by repurposing funds or claiming savings in one area to pay for a different area. This has generally meant saving money that would be spent on tax credits for premiums if they could be used in another way to improve access. Minnesota had their 1332 waiver approved in September, which essentially approved the reinsurance bill passed in the Minnesota legislature back in April 2017. That approval came with a surprising cancellation of $300 million in funding for MinnesotaCare (the state’s basic health plan that covers those earning under 200% of the federal poverty level), which was never articulated as a consequence before the waiver was submitted, nor justified after it was approved. The Alexander-Murray bill would make 1332 waivers easier to obtain and faster to approve, something Minnesota has a vested interest in continuing.
The Alexander-Murray bill would also reclaim the MinnesotaCare money previously revoked by the federal government. Minnesota has historically used the federal tax credits that would have been spent on premium subsidies to fund a basic health plan called MinnesotaCare. So instead of the federal government paying Minnesotans to buy a private plan on the marketplace, the state of Minnesota offers a health plan that is far cheaper for Minnesotans that are eligible based on their income for MinnesotaCare. These provisions would stabilize the marketplace in Minnesota by ensuring that health plans receive funds that subsidize premiums, as well as guarantee that working Minnesotans would have access to MinnesotaCare. It would also make it easier for Minnesota and other states to make their own reforms to more effectively implement the Affordable Care Act.
The Alexander-Murray bill’s other three provisions include funding outreach and enrollment activities, expanding catastrophic level plans to people of all ages (they are currently capped for those 30 years old and younger), and promoting the current ACA rules that allow for health plans to sell policies across state lines. There are concerns about if buyers of catastrophic plans or out of state plans would be contributing enough in premiums to meaningfully share the costs of their care. However, the proliferation of programs like reinsurance, basic health plans, or possibly reforms not yet proposed or implemented would likely help make bronze and silver level plans more palatable for consumers on the individual market when paired with the guaranteed funding of cost-sharing reduction payments and outreach funding. The net effect would not only stabilize the marketplace, but also reduce the national deficit (according the CBO). This is important to note, as the federal government’s’s decision to end cost-sharing reduction payments actually increases the deficit because the federal government has to pay much more in premium tax credits to those in the individual marketplace. Guaranteeing CSR payments and future 1332 waiver programs that save the government money would likely both improve the number of people covered by health insurance, and make it more affordable too.
If we think about the ACA’s major components as a three-legged stool (with those three legs being the guaranteed issue of health insurance that doesn’t factor in pre-existing conditions, the individual mandate to buy insurance, and the requirement of the government to subsidize insurance to make it affordable for working people) the Alexander-Murray bill makes slight alterations. It slightly strengthens the third leg (subsidies for insurance buyers) by lowering premiums, shaves a bit off the first leg (guaranteed issue of insurance) by opening door to lower quality plans like out-of-state networks, but it generally leaves it slightly better than before.
There are some legislators considering pairing this bill with a repeal of the individual mandate to buy insurance (as a means to get reluctant Republicans to vote for the tax bill). This likely won’t matter now, but the problem with this approach is that fundamentally harming the ACA would completely undermine whatever progress Alexander-Murray might achieve by guaranteeing CSR payments and outreach funds. A previous North Star article looked at how repealing the individual mandate would harm the marketplace, and there are several other analyses that indicate a similar effect. Repealing the individual mandate while passing Alexander-Murray is like adding upholstery to a barstool as you chop a leg off. However you might like the new look of the chair, it is still broken chair. The increased freedom to innovate on the state level would be nice if the individual mandate were repealed, but that would be a nice feature to have regardless! Overall, these two provisions do not complement each other well, and do not have equal net effects if both were fully implemented. If Alexander-Murray were to be pursued, it would certainly work better without an individual mandate repeal.