Shaheen proposes ACA insurance market funding fix
CLAREMONT — U.S. Sen. Jeanne Shaheen (D-NH) joined city officials and healthcare leaders on Wednesday for a roundtable forum on potential changes to the Affordable Healthcare Act after her introduction of the Marketplace Certainty Act in June.
The act, currently working its way through a committee, would change the way that cost-sharing reductions are funded. Cost-sharing reductions (CSRs) are essentially subsidies that reduce out-of-pocket costs and insurance co-pays for low-income earners under the ACA. To qualify for CSRs, applicants must make between 100 percent and 250 percent of the federal poverty rate – about $12,000 per year in 2017. Those making less than the poverty rate might qualify for Medicaid.
“I am hopeful that out of all the chaos, we will see something positive happen,” Shaheen said of the current insurance debates.
Under the ACA, insurance companies are required to provide CSRs, but there is currently no legislation that appropriates federal funding for the program. While the current administration has announced as recently as the beginning of August that they will continue to reimburse insurance companies for providing CSRs, there is uncertainty over their commitment to continue doing so.
“If we were to design another healthcare system, we wouldn’t design what we have today in regards to insurance,” Shaheen said.
On top of that, a legal challenge brought by the Republican members of the House of Representatives was won on May 12, 2016. U.S. District Court Judge for the District of Columbia Rosemary Collyer ruled in favor of the House that the current funding of CSRs is technically unconstitutional.
Although arguments were made that the funding of CSRs under Section 1402 of ACA was inextricably related to the appropriation of funds for tax credits under Section 1401, the act never explicitly contained any information on Congressional appropriation.
The United States Constitution requires that only Congress can authorize the appropriation of money from the federal treasury and that it must be made explicit in any legislation, Collyer wrote in her opinion. With that, the practice of reimbursing insurance providers for CSRs was declared unconstitutional.
The tail-end of the Obama administration still reimbursed insurance providers for CSRs despite the ruling, and the Trump administration, thus far, has also continued the practice. But with uncertainty over the continuation of the practice, insurance providers are also uncertain of whether to hike their premiums to offset the loss of reimbursement.
According to a fact sheet from the American Academy of Actuaries, if the subsidies are eliminated with the requirements for providing them intact, unsubsidized individuals would foster the brunt of an increase in premiums to account for the profit margin losses.
In 2017, the Congressional Budget Office estimated that about $7 billion was spent by the federal government on CSR reimbursements. Between 2017 and 2027, the reimbursements are expected to cost upwards of $135 billion.
Despite the uncertainty in the insurance market due to aspects of ACA, Shaheen said, she does not support efforts to repeal the entire act. Likewise, many of the hospital leaders in attendance said that the ACA is vital to their business practices.
“We definitely have to fix it,” Valley Regional Hospital President CEO Peter Wright, FACHE, said of ACA. “I think the Affordable Healthcare Act has been very good for our communities. Like anything, it has some things that could use some work.”
City officials, like City Manager Ryan McNutt and Mayor Charlene Lovett, said that Valley Regional is an important aspect of the economic development of the city. If the hospital were to incur any financial losses, the economic impacts on the area would be tremendous, McNutt said.
“If Valley Regional went away, that would have catastrophic effects not only on the patients but also on Claremont and the development efforts here,” McNutt said.
Lovett also said that it is in the city’s best interest to have an economically viable hospital.
“One of our community’s priorities at this point is the screening and prevention of lead-based paint,” Lovett said. “We cannot do that without the help of Valley Regional.”
