The bipartisan bill proposed by U.S. Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), aimed at shoring up the troubled health insurance markets, has some approaches that would help fix the marketplaces, but more changes are needed, says a health economist at Washington University in St. Louis.
“The Alexander-Murray approach would apply a small number of tweaks to the marketplaces meant to reduce volatility,” said Tim McBride, professor at the Brown School and expert on health reform and access to health care.
First, McBride said, the proposal would make permanent the payments to the plans for “cost-sharing reductions” (CSRs) paid on behalf of low-income persons (under 250 percent of the federal poverty line) to compensate for higher deductibles and co-payments.
“In the Affordable Care Act (ACA), discretion to pay these CSRs was left in the hands of the administration, and this month President Trump announced he would not continue the CSRs,” McBride said.
Second, the legislation would permanently codify sources of payment for consumer outreach, education and assistance. “This would improve the ability of individuals to identify and access marketplace plans,” he said.
Third, the proposed legislation would add an additional type of plan — called “Copper” — to the range of choices of plans offered by the insurers. “This would be a catastrophic plan, which is currently available only to those under age 30,” McBride said.
A fourth proposal would re-institute “reinsurance” for insurers who face high costs from outliers in their insurance pools. This provision from the original legislation was removed by Congress after two years.
Finally, McBride said, the proposal would allow states more flexibility in implementing the ACA. “The previous GOP plans that did not pass contained such provisions, which have also been rejected by Democrats and moderates, but the Alexander-Murray bill would implement a more limited scope of state flexibility changes,” he said.
But will it pass?
“On the one hand, a bipartisan approach has the potential to obtain 50 or more votes in the Senate, since at least two dozen Democrats have already endorsed the legislation,” McBride said. “Combined with moderate Republicans, this could pass the Senate if a vote were held on the legislation, though prospects for passage in the House of Representatives is uncertain.
“On the other hand, President Trump recently signaled that he opposes the current draft of the Alexander-Murray approach, unless changes are made, though he endorses a bipartisan approach,” McBride said.
What needs to happen?
“The marketplaces face some serious underlying issues that are not addressed by this legislation,” McBride said. “In particular, most of the places in the U.S. where the marketplaces are not functioning that well are in rural areas, with low population density. Insurers offering coverage in such areas have a smaller insurance ‘pool’ across which to spread the risks of high costs. This fundamental problem needs to be addressed.”
Read McBride’s full comments at the Institute for Public Health blog.