A compromise, bipartisan Senate proposal that would extend cost-sharing reduction (CSR) payments through 2019 and implement other changes aimed at stabilizing the individual health insurance marketplace under the Affordable Care Act (ACA) should be passed by Congress.

That was the message put forth today by the AMA, which has long urged legislators to take action to address the instability that could be caused by the lack of funding for the CSR payments, which help reduce the out-of-pocket costs borne by low-income Americans.

“Multiyear action is needed to maintain the availability and affordability of individual health insurance plans that millions of Americans count on for access to the medical care they need,” AMA President David O. Barbe, MD, MHA, said in a statement. “We are pleased the proposal includes additional health plan options and provides needed funding for outreach, education and enrollment assistance, while maintaining key guardrails to protect patients as part of the state waiver process. We urge all members of Congress to support the Alexander-Murray proposal.”

Twenty-four senators—half Republicans and half Democrats—have co-sponsored the measure.

In a joint statement, Republican Sen. Lamar Alexander, chair of the Senate Committee on Health, Education, Labor and Pensions, and Ranking Member Patty Murray, D-Wash., said the measure “will protect consumers facing higher premiums this year and give states meaningful flexibility to create greater choices among health insurance policies in the individual health insurance market.”

“The goal of this bipartisan legislation is to stabilize and then lower the cost of health insurance premiums, and ensure that Americans are able to purchase health insurance in the individual health insurance market,” they added.

In a summary of the bill’s highlights, the legislation’s authors say the bill would allow states to offer value-based insurance plans, streamline the 1332 waiver application process, and allow everyone to purchase lower-premium catastrophic coverage “copper” plans.

The bill also would require the Department of Health and Human Services (HHS) to use $106 million in user fees in the plan years of 2018 and 2019 to pay for efforts to promote ACA insurance enrollment. In addition, the measure would require HHS to promulgate regulations allowing plans to be sold across state lines in the individual or small group markets.

It is estimated that at least 6 million people had their costs of care lowered by a CSR, at an annual cost to the federal government of around $7 billion.

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Patients pay price for ending cost-sharing reduction payments

The AMA joined a coalition of organizations representing physicians, hospitals, health insurers and employers in urging Congressional leaders to "take action now to fund" CSR benefits. The joint letter notes the Congressional Budget Office's determination that ending the funding that supports CSR benefits will:

  • Drive up premiums, increasing average premiums for benchmark silver plans—the most popular plans on the exchanges—by 20 percent in 2018, and by 25 percent in 2020.
  • Deny choices for consumers and greatly increase the risk that some places will have no coverage options at all.
  • Increase the federal budget deficit by $194 billion over the next 10 years.

Stabilizing and strengthening the individual insurance marketplace has been one of the principles for health system reform advocated for by the AMA. Others include:

  • Any proposals to replace the current law should not result in individuals currently covered losing their insurance.
  • Key insurance reforms need to be maintained such as coverage for people with pre-existing conditions and parental coverage for young adults.
  • There must be guarantees that Medicaid, the Children’s Health Insurance Program (CHIP), and other safety-net programs are adequately funded.

Editor’s Note: Since the publication of this story, the AMA co-signed an Oct. 20 letter sent to Sens. Alexander and Murray thanking them for their leadership on this issue.

“Consumers and patients benefit from more affordable care and additional choices in a stable individual health insurance market,” the letter states. “Beyond advancing these important policy priorities, federal spending will be lower if CSR benefits are continuously funded. In contrast, terminating CSR funding will increase our nation’s budget deficit by almost $200 billion over 10 years.”

The other organizations signing the letter were the American Academy of Family Physicians, America’s Health Insurance Plans, American Benefits Council, American Hospital Association, Blue Cross Blue Shield Association, Federation of American Hospitals and the U.S. Chamber of Commerce.

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