Former Senator Bill Frist and former Acting CMS Administrator Andy Slavitt say the best chance at meaningful fixes to Obamacare problems after the failure of Graham-Cassidy depends on the work of Sens. Lamar Alexander and Patty Murray.
The nascent effort to find a limited bipartisan solution to the problems with the Obamacare Exchanges by Health, Education, Labor, and Pensions Committee Chairman Lamar Alexander (R-Tenn.) and ranking member Patty Murray (D-Wash.) is perhaps the last, best chance for stabilizing an individual insurance market.
That market is at risk of imploding in many states with skyrocketing premiums and dwindling health plan options.
Indeed, that bipartisan effort has been renewed with the failure of Republicans to garner enough Senate votes to hold a vote on passage of the Graham-Cassidy bill this week.
Acting CMS Administrator Andy Slavitt and former Sen. Bill Frist discussed the scope of the renewed bipartisan effort by Alexander and Murray, the failure of the Graham-Cassidy Obamacare repeal bill, and the future of value-based care initiatives today at a Nashville Health Care Council breakfast event.
Frist interviewed Slavitt after returning late Thursday from working with the group in Washington on negotiations late Thursday.
“There’s no better partner for Alexander than Murray,” said Slavitt.
The two senators have a great working relationship and the focus on not overcomplicating efforts to stabilize the individual insurance market represents a bipartisan effort to start small, Slavitt said.
Frist said the two senators are close to consensus on five to six recommendations to improve the ACA that would bring down premiums and are budget-friendly, but would likely be too late for the 2018 Obamacare plans, contracts for which were signed just this week.
“The key will be how can they sell that to their caucuses in both houses, but I think if they get through that the President would sign it,” Slavitt said.
Any legislation could be retroactive, but working that out would be difficult given the advanced stage of contracting for the 2018 fiscal year.
“The reason Patty and Lamar are working so hard on it is for these 10 million people,” said Frist. “If you don’t get these subsidies, insurers will leave markets, some counties will be left without coverage and the rates will go up for those who stay. They got sidetracked by Graham-Cassidy.”
A solution is available, but uncertainty has to be reduced to encourage insurers to feel comfortable taking on the risk of the individual market, Slavitt told the audience.
Thanks to uncertainty surrounding federal support for subsidies in the plans, many insurers have either pulled out of states or posted huge premium increases for individuals who don’t get subsidies—largely the middle class. For those people, premium increases for 2018 will be as high as 45% in Florida and 60% in Virginia, Frist said. This is compared to average employer-based insurance increases of around 3% for 2018.
The good news is that in 2017, the medical loss ratio for the individual population is roughly the same as employer-based market, said Slavitt, and claims levels are about the same.
“In a steady-state world, you would see rate increases of 8-9%. So how do you get to such high increases? Insurers say they won’t enforce individual mandate, and they can’t price for uncertainty. The irony is they have to raise rates on the middle class,” which is the population Republicans say they want to help, says Slavitt.
That’s why the negotiations by Alexander and Murray are so important, says Frist.
“If anyone can pull off showing there can be bipartisanship, they will,” Frist said.
Slavitt, who pilloried the most recent partisan effort to repeal Obamacare through a barrage of tweets focusing on its proposed cuts, nevertheless says Republicans seem to have a foundation in the plan they put forward in Graham-Cassidy, but thanks to their effort to pass the bill under reconciliation rules, they ran out of time.
“It’s possible Republicans have now found a foundation,” he said. “Like it or not, there is a coherence to the plan they put forward.”
Philip Betbeze is the senior leadership editor at HealthLeaders.