Bill Frist Says CSR Payments Should Be Extended
Former U.S. Senator from Tennessee Bill Frist has authored an op-ed in Forbes voicing his support for the extension of cost-sharing reduction (CSR) payments, which President Trump is threatening to cut off after the GOP’s failed attempts at repealing Obamacare.
Urging the administration to “put out the fire instead of burning exchanges to the ground,” Frist calls for the stabilization of the insurance markets now so that Congress may begin working on bipartisan health reform.
The full article can be read online or below:
Eight years ago, former Democratic Senator John Breaux and I wrote: “Given the acrimony that’s developed over efforts to reform our nation’s health insurance system, many Americans wonder whether true bipartisan agreement on health reform can ever be possible. In short, it can.” Back then, we watched contentious debate over what came to be known as Obamacare, and we never saw bipartisanship materialize. But in 2003 we both participated in creating and enacting the bipartisan Medicare Modernization Act that established the enormously successful Medicare Part D. Bipartisanship was alive then. We missed an opportunity eight years ago, but over the next few weeks we have another prime chance.
The healthcare (and health) of 11 million Americans hangs in the balance. This may sound like a small portion of America’s insured population, and as a percentage it is, but these are all people we know. The 6 percent of Americans who buy their insurance on the individual market are the small business people, contract workers, entrepreneurs, musicians, stay-at-home parents, job seekers, and the millions of Americans who can’t receive coverage through their employers. They are Republicans, Democrats, and Independents. Trump supporters and Hillary voters. And their ability to purchase coverage on the exchanges is in jeopardy, as mixed signals from Congress and the Administration have left insurers scrambling to decide whether to hike already costly premiums or pull out entirely—triggering the beginnings of collapse in some regions.
In my home state of Tennessee, two thirds of our 95 counties are projected to only have one insurer in 2018, while hundreds of counties nationwide at are risk of having no insurer offering individual coverage at all. Waiting for collapse may force Congress to the negotiating table as some have suggested, but it would hurt many innocent, poor, and sick people in the process.
There comes a time when we have to check our party loyalty at the door and put the needs of the people first, and that time is now.
The American people agree. A Kaiser Family Foundation survey found three-quarters of the public—including over half of Trump supporters—want the President and his administration to do what they can to make the Affordable Care Act work rather than trying to make it fail so they can replace it later.
My former colleague and current Chairman of the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP), Senator Lamar Alexander, said, “There are a number of issues with the American health care system, but if your house is on fire, you want to put out the fire, and the fire in this case is the individual health insurance market.”
The first step in extinguishing this fire is to extend the cost-sharing reduction (CSR) payments. These are the payments President Donald Trump has repeatedly threatened to cut off, creating serious uncertainty and instability in the markets. The Affordable Care Act requires insurance companies to offer discounts to lower-income consumers on the exchanges (those who make 100 – 250 percent of the Federal Poverty Level, or roughly $30,000 for an individual or $60,000 for a family of four). Thus would be a money-losing proposition for insurers without the federal reimbursement provided by the CSR payments. If insurers don’t get reimbursed through the CSRs, they will drop out of the market or raise rates significantly to cover their projected $7 billion loss. States that did not expand Medicaid—which are more likely to have Republican elected leadership and Trump voters—will be hardest hit, since they have a greater number of low-income individuals reliant on the individual market.
Some have termed the CSR payments “bailouts” for insurers, but the irony is that failure to extend them will actually cost taxpayers 23% more than the savings generated by their elimination. According to the Kaiser Family Foundation, the resulting premium hikes would trigger automatic increases in the size of premium tax credits paid by the federal government, totaling a net increase cost of $2.3 billion for fiscal year 2018.
Extending these payments not only makes sound fiscal sense, it will help millions of Americans maintain access to health care coverage and give Congress the breathing room necessary to craft meaningful reforms to the system that accounts for nearly one-fifth of our economy.
In the last few days, we have seen hopeful signs of bipartisanship returning to Washington, with the Senate HELP Committee announcing hearings in September with input from all committee members, to the bipartisan House Problem Solvers Caucus coming forward with a short-term plan for stabilization supported by over 40 Republicans and Democrats. We are seeing growing support for the use of waivers to establish reinsurance programs for high-cost, high-need individuals – as has been proposed in Alaska and Minnesota—and for a “stabilization fund” for states to be used in multiple ways including premium support or reinsurance. These are bipartisan concepts that appeal to both red and blue states and deserve serious debate in Congress. As Senator John McCain wisely said on the Senate floor last week, “The Obama administration and congressional Democrats shouldn’t have forced through Congress without any opposition support a social and economic change as massive as Obamacare. And we shouldn’t do the same with ours.” Any lasting, successful reform to our healthcare system depends on a bipartisan solution, and we must stabilize the markets now to give our Congress time to begin these negotiations in earnest.
Since last March I have co-chaired with former Senator Tom Daschle a bipartisan group of healthcare leaders at the Bipartisan Policy Center (BPC). This politically diverse group of five Republicans and five Democrats have consistently called for a two-year extension of the CSR payments. We reiterate that call again today. Time is of the essence. Right now, insurers are filing corrections to their 2018 plan rates and petitioning states to change their service areas. Final premium prices are due August 16, and by September 27 health insurers must sign the final marketplace participation contracts. Many insurers, with the uncertainty of whether CSR payments will continue, have initially filed two different pricing options. Without more certainty of extension, they will use the higher rates that are nearly double what they would be if the CSR payments were continued. Or worse, they may simply pull out altogether at the last minute if the payments are still in jeopardy when these deadlines hit (four major insurers—Anthem, Cigna, Health Care Service Corp and Molina Healthcare—have all said they are weighing pulling out).
At the BPC we have held numerous roundtables and listening sessions with insurers, providers, healthcare leaders, state policymakers, and those on the ground implementing care, and routinely the number one recommendation to stabilize markets in the short-term is to extend the CSR payments . The White House has indicated it plans to make a decision this week, and I urge President Trump to heed the advice of our nation’s healthcare industry and policy leaders, as well as the very real needs of 11 million Americans, and allow payments to continue . It would also avoid ensnaring the Administration in costly lawsuits with states over the payments, which a federal appeals court ruled on August 1st could be permitted.
It’s time to stop the partisan sniping and get to work on crafting sound policy. We should put out the fire and begin to rebuild, instead of letting it all burn to the ground.