Congress returned to DC last week and are once again tackling health care. The Senate Health Committee started hearings about stabilizing the health insurance market. Senators Lamar Alexander (R-TN) and Patty Murray seek to craft bipartisan legislation, but Murray acknowledges that “threading the needle will not be easy.” The committee heard from insurance commissioners, including Washington’s Mike Kreidler, five Governors (MA, TN, UT, MT and CO), and other experts. Kreidler testified about our state’s individual market collapse in the late 1990s, saying “if you ignore the early warning signs of instability, the market will collapse. Let me be your harbinger – it can and will happen if you do not take action now.” We expect to hear more about the following key issues as the bipartisan work continues.

• Cost-sharing subsidies (CSRs) remain a key element to market stabilization. In August, the Congressional Budget Office concluded that failure to fund the payments to lower out-of-pocket costs for low-income consumers would increase the federal deficit by $194 billion over the next decade by driving up premiums and automatically increasing federal premium subsidies. The need for this funding seems like a no-brainer that both sides understand, but can they agree on how long to continue it? Kreidler pushed for permanent funding, as do many Senate Democrats supporting the Marketplace Certainty Act from Senator Jeanne Shaheen (D-NH).
• Section 1332 innovation waivers through the Affordable Care Act (ACA) allow states to ask federal permission to waive key ACA requirements to experiment with different coverage models. Democrats want to protect the “guardrails” that prevent people from losing affordable coverage or weakening benefits. Republicans argue that those guardrails inhibit state flexibility; they seek easier access to waivers.
• A pool of reinsurance money for health plans was included in the ACA for the first three years and the Democrats want to revive it to help insurers defray the costs of high-cost customers. In July, Alaska received 1332 waiver approval to create a reinsurance program using federal funds.

Senator Orrin Hatch (R-UT) opened a Senate Finance Committee hearing on cost and coverage this week by equating CSRs to insurance company “bailouts”. But the Bipartisan Policy Center included CSR continuation in their five recommendations to stabilize the individual insurance market.