The bipartisan effort led by Senators Lamar Alexander and Patty Murray represents an important, fiscally responsible step towards getting the country past an immediate crisis in insurance markets so that we can move on to debate necessary longer-term health care system reforms.
The apparent agreement between the Republican and Democratic senators follows the Trump administration’s moves last week to weaken the insurance structure of the Affordable Care Act (ACA) through an executive order and to stop paying cost-sharing reduction payments (CSRs) to insurers remaining in the ACA marketplaces.
CSRs are monthly payments to insurance companies to reimburse them for lower deductibles, co-pays and other out-of-pocket costs for low-income individuals. Yet stopping them is actually costly to the federal government. The uncertainty and the lack of timely payment will lead some insurance companies to exit marketplaces and is already leading others to raise premiums by 15 to 20 percent higher than they otherwise would have been. This will mean higher federal spending since insurance subsidy costs increase along with premium increases. The Congressional Budget Office projects that the process would lead to an increase in the deficit of $194 billion over ten years.
The Alexander-Murray framework would provide for these payments through 2019. It would also restore funding for outreach to get healthier individuals to sign up for insurance as well as provide for greater oversight on the administration’s marketplace efforts. The framework would also increase state-level flexibility in administering their insurance systems.
Taken together, these provisions would help to solidify the marketplaces. Having bipartisan buy-in on the changes would also counteract signals in the executive order that might undermine market stability. Ultimately, such improvement in how the marketplaces work is key to getting past the wasteful divisiveness of the current health care debate and towards a more stable and thus ultimately more fiscally responsible health care insurance market.
Hopefully that would allow Congress and the president to finally address the real and growing threat to the nation’s long-term fiscal health: a system where costs to the government and the private sector for health care grow more quickly than the economy can keep up with. None of the recent health care debate has touched on that, and we need to get to it sooner rather than later.