Less than a week ago, President Donald Trump issued an executive order to undermine the Affordable Care Act’s (ACA, or Obamacare) health insurance exchanges. He then followed that up with a decision to end the cost sharing reduction reimbursements that keep insurance costs low on the exchange.
Yesterday, Senators Lamar Alexander (R-Tennessee) and Patty Murray (D-Washington) announced a tentative deal to resume cost sharing reduction (CSR) payments. What might this mean for Nevada consumers? We hear from the experts on what’s at stake for our health care.
It’s a positive first step for a Republican and a Democrat to team up on this deal.”
– Jesse Cross-Call, Center on Budget and Policy Priorities
After many months of talks on a bipartisan health care stabilization package, Senators Alexander and Murray have reached their CSR agreement just in the nick of time. CSR’s are used to lower out-of-pocket expenses, such as deductibles and doctor’s office co-pay’s, for lower income consumers who qualify. The Alexander-Murray agreement guarantees CSR payments for the next two years.
We spoke with Jesse Cross-Call, Senior Health Policy Analyst at the Center on Budget and Policy Priorities (CBPP), just minutes after Alexander and Murray announced their deal. “It’s a positive first step for a Republican and a Democrat to team up on this deal. In this environment, it’s a very positive first step.”
Why does this matter for the larger insurance market? “Insurers are required to pay these cost sharing reductions. What Trump did is not reimburse them.” Cross-Call then explained how this materializes: “What the insurers do in response is hike up the premiums, which means higher costs for everyone. People with higher incomes still have to pay more, as insurers load more of the costs on the front end.”
“The swiss cheese [health insurance] plans would have less coverage for those on them, and higher costs for everyone else.”
– Mason VonHouweling, UMC CEO
In addition to the two-year cost sharing reduction guarantee, the Alexander-Murray deal allows for more “catastrophic coverage” insurance plans that closely resemble Bronze-level plans on the exchange. Trump’s health insurance executive order encourages federal agencies to expand access to health insurance plans that don’t meet ACA “essential health benefits” guidelines.
On a press call yesterday, University Medical Center (UMC) CEO Mason VonHouweling explained how this affects his hospital and Nevada’s overall health care system. He referred to these non-compliant plans as “swiss cheese”, then described how this move could harm consumers across the board. “The swiss cheese plans would have less coverage for those on them, and higher costs for everyone else.”
Jesse Cross-Call at CBPP went deeper in explaining how these “swiss cheese” plans poke holes into the entire health care system. “These plans won’t have to offer comprehensive coverage. The effect will be they’re cheaper, as they don’t cover as much,” Cross-Call told us. “They may pull away younger, healthier enrollees. That will in turn have an adverse effect on the risk pool in the exchange. If you take them out of the risk pool, the cost to cover everyone else will go up.”
“Improving the law will get more people enrolled, and make coverage more affordable.”
– Jesse Cross-Call, CBPP
UMC is one of several Nevada health care institutions that have benefited from the ACA’s expansion of coverage. CEO Mason VonHouweling “Pre-ACA, 65% of those treated had health insurance. Now, about 90% of those we treat have health insurance. UMC’s bottom line has improved, as we’ve made $58 million in income these past two years.” He stated that if Trump’s executive actions stand, and especially if Congress takes up more Trumpcare legislation, UMC risks a return to the bad old days when Clark County struggled to keep the hospital out of bankruptcy.
Jesse Cross-Call also recommended Congress pursue more Alexander-Murray like agreements and fewer Trumpcare votes.”It’s important that they set aside this repeal madness. It’s caused uncertainty to insurers and to states. Improving the law will get more people enrolled, and make coverage more affordable.”
In July, and again in September, Senator Dean Heller (R) supported Trumpcare bills to repeal much of the ACA, including Medicaid expansion, “essential health benefits” coverage, and guaranteed coverage for people with pre-existing conditions. Heller is probably a key swing vote in the Senate, but his office has not yet commented on whether he’d vote for the Alexander-Murray proposal. In contrast, Senator Catherine Cortez Masto (D) tweeted her support for the proposal earlier today.
Donald Trump himself expressed support for the Alexander-Murray deal yesterday, then rescinded his endorsement on Twitter this morning. Thus far, House and Senate Republican leaders have yet to indicate whether the bipartisan proposal will even reach the floor in either chamber.
(Cover photo made available by the U.S. Department of Energy, and obtained through Wikimedia Commons.)