[Congressional Record Volume 163, Number 175 (Monday, October 30, 2017)]
[Senate]
[Pages S6866-S6868]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
Healthcare
Mr. ALEXANDER. Mr. President, when the 18 million Americans in the
individual insurance market--those are Americans, shopkeepers,
songwriters, farmers, men and women who don't get their health
insurance from the government or on the job--begin enrolling on
Wednesday, they will discover something very strange.
The Wall Street Journal, in a weekend story, explained exactly how
strange this phenomenon will be. Some of these 18 million Americans
will be able to get their insurance for free. They will pay absolutely
nothing for their premium, but others will see their premiums skyrocket
far beyond the increases they have seen in recent years.
Here is what the Wall Street Journal says:
In nearly all of the 2,722 counties included in the data,
some consumers will be able to obtain free health insurance
because they qualify for larger federal premium subsidies
that cover the full cost of the plan, according to the new
analysis.
The Wall Street Journal continues:
In the coming weeks, insurers are gearing up to promote the
no-premium option. . . . On the flip side, those who don't
get premium subsidies under the 2010 law may be responsible
for the full brunt of steep rate increases, though they may
be able to mitigate the impact by staying away from silver
plans.
Insurers are gearing up to shepherd Americans into plans that will
cost zero because taxpayers will be paying much higher subsidies.
Meanwhile, the 9 million Americans in the individual health insurance
market who do not have subsidies may be responsible for what the Wall
Street Journal calls the ``full brunt of steep rate increases.''
What is causing this strange phenomenon? It is happening because
Congress--us--has not funded cost-sharing reduction subsidies, or CSRs,
for the 2018 plan year. Cost-sharing reduction subsidies are payments
in the Affordable Care Act which the government makes to insurance
companies to reimburse them for deductibles and copays for many low-
income Americans. According to the U.S. District Court for the District
of Columbia, the President of the United States can no longer make
these payments himself without the approval of Congress so President
Trump ended those payments this month.
Insurance companies have raised premiums to make up the difference,
loading most of the increase on the silver plan premiums. They did that
because, under the Affordable Care Act, subsidies are based on silver
plan premiums. So as premiums go up, subsidies go up. If silver plan
premiums skyrocket, then the subsidies skyrocket, and then you can use
your giant subsidy to go buy a bronze plan and pay nothing in premiums.
In California alone, according to the Wall Street Journal article,
about half of the 1.1 million who buy health insurance with subsidies
can get their insurance for free next year. To be clear, because
Congress didn't provide temporary funding for the cost-sharing
reductions for 2018, more than half of Californians on the ACA exchange
can get free government-paid healthcare.
For the last few weeks, I have been saying that the chaos we are
going to see, if we don't continue the cost-sharing payments, will be a
four-lane highway to single-payer insurance. Now we see why. Premium-
free private insurance for millions funded by the taxpayer--I am not
sure what is conservative about that.
We don't need to worry about the insurance companies. They obviously
know how to take care of themselves. As the article details, if the
cost-sharing payments aren't made over 2 years, insurance companies
shouldn't lose a penny. They have to pay, under law,
[[Page S6867]]
the copays and deductibles, but they have already secured permission to
raise premiums for 2018 to cover that. Because courts have said the
payments are illegal, they secured approval of rates that are 20
percent higher in 2018 just for this purpose. So the insurance
companies are not hurt by stopping the cost-sharing reduction payments.
If subsidized Americans aren't hurt by stopping the payments and
insurance companies aren't hurt by stopping the payments, then who is
hurt by stopping the payments? Hard-working, low-income Americans
making less than $11,000 a year who don't qualify for Medicaid and
Americans who make more than $47,000 a year and who therefore have no
government subsidy to help buy insurance. They must face these premium
increases on their own.
A hard-working Tennessean in the individual market--let's take a look
at her. She has already seen her premiums increase 176 percent over the
last 4 years. For 2018, it is going to be up another 36 percent in
Tennessee, on average. She will pay the whole bill, no government help.
Then take the American taxpayers. The Congressional Budget Office
tells us that failure to continue the cost-sharing reduction payments
increases premiums and therefore the subsidies to pay for those
premiums by $194 billion over 10 years--$194 billion over 10 years
added to the Federal debt because we don't continue the cost-sharing
subsidies.
How do we avoid this? Believe it or not, we can avoid this situation
by enacting a bill that will both prevent this strange phenomenon and
reduce the Federal deficit by $3.8 billion. Senator Murray from
Washington, the ranking Democrat on the Senate HELP Committee, and I
introduced this bill. We were among 12 Republicans and 12 Democrats
last week who proposed the bill and recommended it to the Senate, to
the President, and to the House of Representatives after we conducted
four hearings. In addition, we invited Senators not on the Senate HELP
committee to join us in the development of this bill, and 37 showed up.
We had about 60 of us who had some participation in the development of
this proposal that Senator Murray and I recommended. We presented to
the Senate our recommendation for continuing cost sharing and giving
States more flexibility in approving premiums so people would have more
choices and lower prices.
You may have noticed that a growing number of Republicans and
conservatives are recommending that Congress act to continue for 2
years the so-called cost-sharing reduction payments as copays and
deductibles for low-income Americans. The heads of the two tax-writing
committees, Senator Hatch and Representative Kevin Brady, introduced
legislation that would continue cost sharing in 2018 and 2019. In fact,
earlier this year, almost all House Republicans voted to continue cost
sharing for 2 years as part of their repeal-and-replace ObamaCare bill.
Senators Bill Cassidy and Lindsey Graham have said the provision to
continue cost sharing temporarily would have been a part of their
Senate repeal-and-replace bill, but Senate budget reconciliation rules
didn't allow it.
President Trump has recognized this. He has asked for a short-term
bill to prevent this kind of chaos. He encouraged me to talk to Senator
Murray about this and to use cost-sharing reduction continuation as a
way to negotiate some more flexibility for States so they could approve
more choices at lower prices, which is exactly what Senator Murray and
I did. That is what we recommended--the 24 of us, 12 Republicans and 12
Democrats--to the full Senate last week.
Some people still worry that continuing the cost-sharing payments is
the same thing as propping up ObamaCare--those are the words we hear--
or bailing out insurance companies. We hear those words too. In fact,
just the reverse is true.
As the article explains in the Wall Street Journal, cutting off the
cost-sharing payments, in the current circumstances, would increase
insurance premiums on hard-working Americans who have no government
subsidies, it would increase the Federal debt by nearly $200 billion
over 10 years, and it would spend billions more in taxpayer dollars
funding ObamaCare subsidies. Let me say that again. As the Wall Street
Journal article explains, cutting off the cost-sharing payments in the
current circumstances will increase insurance premiums on hard-working
Americans who receive no government subsidies--up 36 percent in
Tennessee--increase the Federal debt by $200 billion over 10 years, and
spend billions more in taxpayer dollars funding ObamaCare subsidies.
There are two groups of people who would be basically held harmless
if Congress does not approve the cost-sharing payments; one, Americans
with ObamaCare subsidies; and, two, insurance companies. On the other
hand, according to the CBO report last week, continuing the cost-
sharing subsidies as part of the Alexander-Murray agreement would
actually save taxpayers $4 billion by reducing premiums and therefore
ObamaCare premium subsidies.
During 2018, it would provide rebates to consumers State by State to
those hard-working Americans with no government subsidy, and it would
begin to lower premiums in 2019. It would also give all Americans the
opportunity to buy a new category of policy--catastrophic--so that a
medical catastrophe doesn't turn into a financial catastrophe, and it
would give States more flexibility to write policies with more choices
at lower prices.
Many States want to do that. They need these additional flexibilities
to stabilize their markets because problems with the individual market
did not start with the uncertainty over the cost-sharing payments. We
need to return power over the insurance markets to States if we want to
begin creating long-term solutions.
The President and many others have said they don't want to bail out
insurance companies. I don't want to bail out insurance companies.
Senator Murray doesn't want to bail out insurance companies. I don't
think I have run into anybody in the U.S. Senate who wants to bail out
insurance companies. Our agreement doesn't bail out insurance
companies. In fact, it does just the reverse.
If President Trump is looking for his majority, he might find it in
Americans who don't like higher taxes and who don't like more
government funding for ObamaCare subsidies. Somewhere the idea got
started that continuing cost-sharing payments bails out insurance
companies, but insurance companies are big boys and girls. They know
how to take care of themselves, and they have proved it once again.
Failure to continue the cost-sharing subsidies is going to hurt
taxpayers, and it is going to hurt unsubsidized Americans who have no
subsidy to help buy their insurance. There is nothing conservative
about that.
Before I yield the floor, I ask unanimous consent to have printed in
the Record an article from the Wall Street Journal Weekend Edition
entitled ``More ACA Plans to Come With No Premiums in 2018.''
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Wall Street Journal, Oct. 27, 2017]
More ACA Plans To Come With No Premiums in 2018
(By Anna Wilde Mathews and Christopher Weaver)
Trump indirectly bolstered the federal subsidies that help
consumers with their insurance premiums.
More people will be eligible in 2018 for no-premium health
plans under the Affordable Care Act.
Insurers selling Affordable Care Act plans have a
compelling new pitch: free health insurance.
When sales of plans on the law's exchanges begin Nov. 1, a
growing number of consumers around the country will be able
to get coverage for 2018 without paying any monthly premium,
according to health insurers and an analysis of newly
available federal data.
In nearly all of the 2,722 counties included in the data,
some consumers will be able to obtain free health insurance
because they qualify for larger federal premium subsidies
that cover the full cost of a plan, according to the new
analysis.
The growing availability of no-premium plans is a side
effect of a decision by President Donald Trump's
administration to end federal payments that are used to
reduce out-of-pocket costs, such as deductibles, for low-
income enrollees. The administration didn't halt--and
indirectly bolstered--the federal subsidies that help
consumers with their insurance premiums.
The new analysis doesn't project exactly how many consumers
could be eligible for the no-premium plans, a figure that
depends
[[Page S6868]]
on variables including people's income, household size, age,
location and access to other types of health coverage.
In the coming weeks, insurers are gearing up to promote the
no-premium option. Amid uncertainty about the future of the
2010 health law, known as Obamacare, many insurers have
pulled back from the law's marketplaces. Many of the
remaining ones are worried about losing enrollment next
year--largely among consumers who aren't eligible for
subsidies and won't be able to get premium-free plans.
Insurers hope the no-premium insurance draws in more
enrollees, particularly those they need most: people with few
health needs. Healthy consumers help bolster the stability of
the market by balancing out the health costs of sicker
enrollees.
``We absolutely will be promoting this opportunity to get
coverage at a zero price,'' said Wendy Curran, a spokeswoman
for Blue Cross Blue Shield of Wyoming, which is mentioning
the no-premium plans in print, radio and social-media
advertising. ``We hope those younger people will say, `Well
yeah, if it's not going to cost me anything, sure.' ''
Ms. Curran said it was ``astounding even to us'' how many
people will be able to get no-premium insurance in Wyoming.
The no-premium plans will also receive a hefty promotional
push from insurance agents. EHealth Inc. and HealthMarkets
Inc., both big national agencies, said they're preparing to
highlight the option in advertising and other outreach.
``It's just the idea of something free being really
appealing,'' said Nate Purpura, a vice president at eHealth.
The company's surveys have consistently shown that price is
the most important factor in consumers' choice of plan, he
said.
Availability will vary by age and income, but some
enrollees who don't have a very low income may be able to
land zero-premium coverage, according to the analysis of
federal data conducted by consulting firm Oliver Wyman, a
unit of Marsh & McLennan. The firm found that zero-premium
ACA exchange plans would be available next year to at least
some consumers in a total of 2,692 counties, out of 2,722 in
the study.
A 60-year-old making about $36,000 a year could find free
2018 plans in 1,590 counties, while one with income of about
$48,000 could do so in 654 counties, according to the
analysis, which used data released Wednesday for plans
available on HealthCare.gov, the federal marketplace used by
39 states.
For 2017, no-premium plans were available in many places
for the very lowest-income enrollees, but for those at
slightly higher levels, they were much more scarce. For
instance, in 2017, a 60-year-old making about $36,000 could
find free plans in about 300 of the counties.
That is what is different in 2018, said Kurt Giesa, a
partner at Oliver Wyman. The zero-premium plans are ``much
more prevalent now than they were,'' he said.
In California, which isn't included in the federal data,
there is a ``huge increase from last year'' in the number of
people who are eligible for zero-premium plans, said Peter V.
Lee, executive director of Covered California, the state's
ACA exchange. Covered California currently has about 1.1
million enrollees who receive federal-premium subsidies, and
more than half of them will be able to buy a no-premium plan
for 2018, he said.
The growing availability of no-premium plans is tied to the
complicated dynamics of the 2010 heath law, as well as a
recent move by the GOP president.
Under the law's rules, subsidies that help pay for premiums
are available to people making up to about $48,000 a year.
Those subsidy amounts are linked to the cost of the second-
cheapest silver plan in an enrollee's location. So, when
silver premiums go up, subsidies go up.
Earlier this month, Mr. Trump's administration cut off
federal payments to insurers for covering certain out-of-
pocket costs for low-income enrollees in silver plans. In
response, insurers raised premiums on their 2018 policies
sharply to cover the extra expense, now coming out of their
pockets--and in many cases, they loaded the extra boost only
onto the silver plans. Because the separate premium
subsidies, which Mr. Trump didn't cut, are linked to silver-
plan prices, those subsidies are rising, too. In many states,
the costs for cheaper bronze plans are going up much less
rapidly than silver plans, so many more people will wind up
being eligible for no-premium plans.
On the flip side, those who don't get premium subsidies
under the 2010 law may be responsible for the full brunt of
steep rate increases, though they may be able to mitigate the
impact by staying away from silver plans.
For those who can get free plans, the lure may be
irresistible.
Medica, an insurer that is offering exchange plans in
states including Iowa, Nebraska and Wisconsin, is running ads
in some places that say ``$0 premium plans for individuals
who qualify.'' It is also sending letters to some current
exchange enrollees with bronze plans, who are likely to be
enrolled with Medica in 2018, informing them that they can
stop paying premiums next year. ``That's a nice letter to
get,'' said Geoff Bartsh, a vice president at Medica.
Jerry Dworak, chief executive of Montana Health Co-op,
said, ``of course we're hoping that'' young and healthy
enrollees flock to the no-premium plans.
``If they see that it's free, why not take it?,'' he said.
Mr. Dworak said that a person making as much as $33,000 a
year could get one of his company's Idaho plans and pay no
premium.
The plans may attract more older consumers than younger
because premiums and subsidies rise with age, making free
plans more available to older people.
And for some, the zero-premium plans won't actually be the
best deal, insurers and insurance agents say. The silver
plans could be cheaper overall for people who use much health
care, despite their higher premium costs, if these people are
eligible for the health law's cost sharing help.
According to HealthCare.gov, for instance, a 40-year-old
man in Cheyenne, Wyo., who makes about $24,000 a year could
get a zero-premium bronze plan, but he could pay as much as
$6,650 over the course of 2018 in deductibles and other out-
of-pocket charges. Or he could get a silver plan that would
cost him around $125 a month, but cap his out-of-pocket costs
at $2,450.
``There's this trade-off,'' said Michael Z. Stahl, a senior
vice president at HealthMarkets, who said the company's
agents will walk through the pros and cons with clients.
Mr. ALEXANDER. I yield the floor.
Mr. REED. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The senior assistant legislative clerk proceeded to call the roll.
Mr. McCONNELL. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________