State officials take center stage in ACA stabilization efforts

John Kasich speaking at lectern
Ohio Gov. John Kasich, who has been an outspoken critic of congressional Republicans' recent healthcare bills, is preparing to release his own plan alongside Colorado Gov. John Hickenlooper.

As efforts to stabilize the Affordable Care Act exchanges begin to take shape, it’s become increasingly clear that states will play a major role.

On Tuesday, Sen. Lamar Alexander, R-Tenn., and Sen. Patty Murray, R-Wash., announced that the Senate’s upcoming bipartisan healthcare hearings will feature testimony from “those closest to the problem”—state insurance commissioners and governors. The hearings are planned for Sept. 6 and 7.

“These state leaders understand full well the challenges facing healthcare today, and many have been outspoken about how the uncertainty caused by this administration has impacted the individual insurance market and therefore families’ premiums for 2018,” Murray said.

Alexander said the goal is to pass a “small, bipartisan and balanced” ACA exchange stabilization package before the Sept. 27 deadline for insurers to lock in their final plans for 2018. He also wants the package to fund cost-sharing reduction payments and “give states more flexibility in approving insurance policies” by improving section 1332 of the ACA.

Kasich, Hickenlooper join the fray

Two state governors, meanwhile, are preparing to offer up their own healthcare plan even before the Senate hearings begin. Ohio Governor John Kasich, a Republican, and Colorado Gov. John Hickenlooper, a Democrat, told Colorado Public Radio on Monday that they hope to unveil the plan within a week.

Previously, Hickenlooper and Kasich joined other state governors in speaking out against the House version of an ACA repeal-and-replace bill, arguing in a letter to Senate leaders that it “calls into question coverage for the vulnerable and fails to provide the necessary resources to ensure that no one is left out, while shifting significant costs to the states.”

That letter, as well as a Washington Post op-ed authored by Kasich and Hickenlooper, outlined a set of core principles for bipartisan healthcare reform—principles that their upcoming ACA stabilization plan will build upon, according to the CPR article. They include improving affordability, restoring stability to insurance markets, providing state flexibility, encouraging innovation and improving the regulatory environment.

Iowa submits stabilization plan

At least one state, though, isn’t waiting on Congress to rescue its individual health insurance market.

On Monday, Iowa officials submitted their application for federal regulators to approve the “Iowa Stopgap Measure,” a short-term stabilization plan formulated by the state’s insurance commissioner with the help of local health plans.

In the application (PDF), Iowa Gov. Kim Reynolds urged federal officials to quickly approve the measure, noting the state faces “an immediate collapsing market that could leave thousands without health insurance and the rest with 56% or higher premium rate increases.”

The plan, which requires the use of a section 1332 waiver, would redirect the $305 million in federal funding that currently goes toward the ACA’s premium tax credits and instead fund fixed, age- and income-based premium subsidies for consumers.

It would also use federal funds to implement a reinsurance program that will reimburse insurers for high-cost individuals who incur claims greater than $100,000 on an annual basis. As part of the program, insurers would have to agree to care-management protocols.