Editor's Corner—If the GOP plays hardball on ACA stabilization, here’s how Democrats should respond

Just pass a narrow bill to stabilize the Affordable Care Act exchanges, they said. It’ll be easy, they said.

It would be easy, of course, if the Senate HELP Committee would just do what it set out to, and craft legislation with a few agreed-upon tweaks to the ACA that will shore it up in the short term.

A great example of this would be a bill that funds cost-sharing reduction payments for the next two years and takes state leaders’ suggestion of streamlining the 1332 waiver process, making it easier for them to innovate within the ACA’s parameters.

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However, recent reports indicate that Committee Chairman Lamar Alexander, R-Tenn., is privately seeking to allow states to use waivers to opt out of some of the ACA’s key consumer protections—an idea Democrats have repeatedly rebuked. 

In the Senate HELP Committee's most recent hearing, Alexander sought to temper those concerns, saying that he's "not proposing we change” protections for patients with pre-existing conditions, allowing young adults to stay on their parents’ health plans, guaranteeing consumers the right to buy health insurance or regulations against annual limits on insurance plans.

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That doesn’t mean, though, that Democrats don’t have the power to negotiate if Republicans try to move the measure too far to the right.

Opinion polls have indicated that if the ACA’s marketplaces fail, many voters will blame Republicans—regardless of what President Donald Trump claims. And fail they might absent quick action from Congress to at least guarantee CSR funding for one year.

So what’s a Democratic senator to do? Ideally, throw a few bones to Republicans but don’t let them get away with significantly eroding the ACA’s consumer protections. Here’s an idea of what that strategy might entail:

Non-negotiable

• Protections for those with preexisting conditions. The ACA’s community rating and guaranteed issue provisions say that insurers can neither deny coverage nor impose premiums surcharges based on health status. Together with the individual mandate, they form the “three-legged stool” of the ACA’s individual market reforms. Alexander's words during Tuesday's hearing were indicative of how politically perilous it is to take away these protections, which consumers have now come to expect. And no one is going to be fooled into thinking it’s a better idea to let states be the bad guy and opt out of these protections, either. Democrats should seize on new reality and push back if any right-leaning senators take aim at these two provisions.
• Essential health benefits. A common GOP talking point is that the ACA forced generous benefit packages down people’s throats. Why should a man have to pay for maternity coverage, for example? The problem with that argument is that it goes against the whole idea of having insurance, as the Center for American Progress’ Ezekiel Emanuel has pointed out. “A system that only has women who will bear children pay for maternity care or only families pay for pediatric care is not insurance—it is pay-as-you-go,” he wrote in a Washington Post op-ed. If states can use waivers to opt out of EHBs, some would undoubtedly return to the pre-ACA status quo, when, as the Kaiser Family Foundation has noted, maternity care, substance abuse and mental health care services often went uncovered in individual market plans.

Negotiable

• The individual mandate. Even the individual mandate’s proponents at this point seem to concede that it’s a necessary evil that allows community rating and guaranteed issue to be possible. As Teresa Miller, Pennsylvania's acting health and human services secretary, said during last Wednesday’s Senate hearing: "I haven’t seen an alternative to the individual mandate that would be as good an option to make sure that we’ve got the young and healthy" in the risk pool. If states get the opportunity to use 1332 waivers to opt out of the mandate, it would be wise to first ask them to prove—perhaps via predictive modeling—that they have an idea that would work just as well as the tax penalty levied on those who don’t get covered.
• Age-rating bands. Under the ACA, insurers aren’t allowed to charge older enrollees more than three times what they charge younger ones. Those on the right—including some state insurance commissioners who recently testified before the Senate HELP Committee—want to change the ratio to 5:1. The idea is that the resulting lower rates would attract more young, healthy consumers to balance out the ACA exchange risk pool. A decent compromise might be a 4:1 rating, or if Democrats really are up against a wall, going with 5:1. Groups like the AARP will put up a fight, but the political consequences might not be as severe as loosening other consumer protections.

Ultimately, all the back-patting that senators have done during the Senate HELP Committee hearings will be for naught if senators can’t make good on their pledge to stabilize the ACA in time for insurers to finalize their plans for next year. That might require concessions from both sides, which certainly won’t be easy—but a lot easier than facing the consequences of doing nothing. —  Leslie | @lesliecsmall