Pennsylvania: ACA exchange bill cosponsor's strategy for winning over fellow GOP support? Pretending it's Trump's idea.
Last night I wrote a long entry noting that Pennsylvania, which has a Democratic Governor but a Republican-controlled state legislature, is taking swift action today to pass a bill allowing PA to establish their own state-based ACA healthcare exchange:
Pennsylvania is moving to take over the online health insurance exchange that’s been operated by the federal government since 2014, saying it can cut health insurance costsfor the hundreds of thousands who buy the individual Affordable Care Act policies.
New legislation unveiled Tuesday has high-level support in Pennsylvania's House of Representatives, with the chamber's Republican and Democratic floor leaders as the bill's lead co-sponsors.
A House committee vote was scheduled for Wednesday, underscoring the urgency of the legislation.
The bill is backed by Gov. Tom Wolf, a Democrat, and his administration says it would make two important changes to reduce premiums for the 400,000 people who purchase health insurance through the Healthcare.gov online marketplace.
It's fascinating to me to see this bill getting bipartisan support. Not only is Pennsylvania's GOP House Floor Leader pushing for it, a bill providing funding to help states move to their own ACA exchanges is also being heavily supported by one GOP U.S. Congressman from Pennsylvania (Brian Fitzpatrick, PA-01). It's a true sign of how the politics of the ACA have shifted over the past decade.
Even so, getting his fellow Republicans onboard to support any bill which admits the Affordable Care Act is here to stay is quite an uphill climb, so GOP floor leader Cutler (along with his Democratic counterpart, minority PA House floor leader Frank Dermody) have come up with a novel approach:
In the near future, we will be introducing legislation which will create an authority to operate a state-based health insurance exchange for Affordable Care Act individual market plans. The legislation will also permit the Commonwealth to apply for a Section 1332 State Relief and Empowerment waiver to create a reinsurance program to drive down premium increases in the individual market. The Trump Administration has provided greater flexibility and opportunities for states through such waivers.
As we know, states are the testing grounds of innovation and potential solutions to our everyday issues. President Trump on his first day in office issued an executive order to provide greater flexibility to States and cooperate with them in implementing healthcare programs. CMS followed that with new guidance for States seeking more flexibility through waivers. To date, CMS has approved 8 waivers. The reinsurance waivers offer states important tools to reduce premiums and stabilize the market.
The programs will not require any General Fund dollars. Once implemented, over 400,000 consumers should experience health insurance premiums 5-10% lower than what they otherwise would pay. The federal government is expected to fund 75% of the reinsurance programs costs. The remaining 25% of the costs are paid by the Authority. The Authority contribution will be generated by converting to a State-Based Exchange but continuing to assess a user fee that is equal to or less than the federal user fee.
The reinsurance program will allow insurers to price their products lower by limiting their exposure to very high, unpredictable medical expenses incurred by their members by covering some of those expenses when they exceed a certain threshold.
Please join us in co-sponsoring this legislation.
(sigh) OK. Here's the thing: First of all, yes, I fully support PA splitting off to create their own full state-based ACA exchange, as long as it's done and managed properly. And I also fully support the state applying for a 1332 reinsurance waiver to cut premiums down somewhat (even if only by 5-10%), using the savings from the reduced exchange fees to pay for the state's portion of the funding, which is pretty clever.
Having said that, the Trump Administration didn't create 1332 waivers, nor did the 1332 changes put in place by Trump allow reinsurance waivers to be granted. They were always there. The 1332 section of the ACA has been around from the day the bill was signed in 2010, and other 1332 waivers were submitted long before Trump took office. The first reinsurance-specific 1332 waiver was submitted by Alaska back in 2016...addressed to Obama Administration HHS Secretary Sylvia Burwell.
So why didn't any of the states submit reinsurance waiver requests before Trump took office? Simple: The federal ACA reinsurance program just happened to sunset at the end of 2016...just after the Presidential election. That was a big part of the reason for the ~25% average premium hikes in 2017.
With the federal program having ended, causing premiums to spike sharply, many states started looking into reestablishing the program at the state level...via 1332 waivers...using the existing 1332 waiver rules under the Obama Administration.
The only "credit" which the Trump Administration deserves when it comes to reinsurance is...approving them. Which it has, and for which I've already given them credit.
However, it's incredibly disingenous for Cutler to try and thank Trump's 1332 waiver "redefinition" for the reinsurance waiver PA is proposing. Most of the other reinsurance waivers were approved before last November's "redefinition".
I should also note that this isn't the first time Republicans have tried to have it both ways on this issue. This is from a thread by Texas Republican Congressman Dan Crenshaw, regarding the House Democrats vote last month to nullify the Trump Administration's "redefinition" of 1332 waivers:
States that have successfully innovated under current law include Alaska, Maryland, Oregon, Maine, Wisconsin, Minnesota, and New Jersey. They have saved money on premiums AND protected pre-existing conditions. Dems are against that, AND lying about it.
— Dan Crenshaw (@DanCrenshawTX) May 9, 2019
Again: All seven of the states he mentioned had their "successful innovations" (i.e., ACA reinsurance waivers) approved under "current law" (i.e., the Obama Administration's definition of 1332 waivers). NONE have been approved under Trump's "redefinition" of the provision as of yet.
UPDATE: D'oh! I completely forgot another important reason for the timing: Amy Lotven of Inside Health Policy just reminded me that under the Affordable Care Act, 1332 waivers couldn't go into effect until 2017 or later anyway! That means even the handful of waiver requests which were submitted before Trump took office couldn't be imlemented until 1/1/17 regardless.
For instance, remember the much-ballyhooed (and ill-fated) Vermont Single Payer proposal from way back which was first voted on in 2011 before eventually dying in 2014? Yeah, that would've required a 1332 Waiver, and was scheduled to go into effect in...2017.
HAVING SAID ALL OF THE ABOVE, if pretending that this is Trump's idea is the only way to get his fellow Pennsylvania Republicans to vote for the state exchange/reinsurance bill...(sigh) fine, whatever. Go for it.