For all the relative comity of the Senate HELP Committee hearings on legislation to strengthen the individual market for health insurance (Sept. 6, Sept. 7), a potential battle line of sort was drawn on Tuesday in statements by the chair, Lamar Alexander, and ranking member, Patty Murray. As the Times' Robert Pear reported:
The main Senate repeal bill, the BCRA, nominally maintained the ACA's EHBs, out-of-pocket maximums, and other consumer protections, but essentially knocked down the guardrails in the innovation waiver process. As Timothy Jost noted, the amended waiver provision required only that states "provide for alternative means of, and requirements for, increasing access to comprehensive coverage, reducing average premiums, and increasing enrollment.” It also basically stripped HHS of its authority to deny approval to a waiver application. While "more flexibility for states" sounds anodyne, Democrats have good cause to be wary.
One point of consensus among the insurance commissioners and governors testifying before the HELP Committee this week is that the waiver process should be faster. That's in large part because states at this point of maximal market stress see an intense need for reinsurance, and the Trump administration HHS has actively encouraged waiver proposals that seek partial federal funding for such programs -- on grounds that they reduce premiums and therefore federal spending on premium subsidies. Alaska has had a waiver for such a proposal approved in July, and Minnesota has one pending.
How exactly could the waiver process be sped up? ACA Section 1332 allows HHS up to 180 days to consider a waiver. Once a proposal is submitted, the federal government must provide a public notice and comment period which should "reflect the complexity of the proposal and in no case can be less than 30 days." As for the material submitted, it must include "actuarial analyses and actuarial certifications, economic analyses, data and assumptions, targets, an implementation timeline, and other necessary information...".
I asked Emma Sandoe, a spokesperson at HHS from 2012 to 2014, currently a grad student in public health at Harvard, whether the current six month time frame for waiver approval is unreasonable. As a point of departure, I noted that the Congressional Budget Office often scores complex legislation very quickly -- for example, its analysis of the American Health Care Act, the House ACA repeal bill, came out a week after the bill was introduced.
True, Sandoe allowed, but "CBO analysis is done a macro, larger modeling scale. HHS is looking at the legality of things and getting into the nitty-gritty...how the proposal might affect individualized populations."
Indeed, HHS requires analysis of a waiver proposal's effects on sub-populations must be analyzed. For example, under "coverage," requirements are as follows:
Bottom line: "I don't see any way to get around the fact that it takes a while to do these things, without sacrificing important existing guardrails."
In more established waiver processes, such as for Medicaid optional programs, which states have been using for a long time to tailor their Medicaid programs, Sandoe noted, "CMS would often create cookie cutter forms for states that want to do the exact same thing. 'If you want to do x, here is the form, here is what you should put in'"...but the track record is not yet in place for ACA innovation waivers, only one of which has been approved so far.
So how could the process be streamlined? "The administration can be clear in what they're looking for and what they'd approve and what needs to be done on a state-by-state level." Sandoe returned to the school paper metaphor: "If you just say 'write an essay about x' that's not as effective as providing a rubric of how you grade things -- with a rubric as clear and detailed as possible."
It should be noted that a reinsurance program in of itself is not likely to have negative or unintended effects on any population groups. In lowering premiums, it should strongly benefit those who need the individual market and don't qualify for subsidies. By making insurance more affordable for the unsubsidized, reinsurance improves the risk pool, which benefits all parties. And there are plenty of precedents -- in state programs implemented pre- and post-ACA implementation, and in the national program that helped hold premiums down from 2014-2016. Further, HHS actively encouraged states to submit such proposal in guidance issued in March of this year.
In short, speed in the innovation waiver approval process seems more a matter of administrative will than Congressional action.
UPDATE, 9/12: In an op-ed co-written with former Senate majority leader Bill Frist, one of those Republicans who grew conspicuously sane upon leaving elective office, Andy Slavitt comes out in favor of cutting 1332 approval time to 90 days.
“To get a result,” Mr. Alexander said, “Democrats will have to agree to something — more flexibility for states — that some may be reluctant to support. And Republicans will have to agree to something, additional funding through the Affordable Care Act, that some may be reluctant to support. That is called a compromise.”The "guardrails" Murray refers to is a term often applied to the conditions states must meet if they apply for "innovation waivers" under ACA section 1332. Under Section 1332, states can propose to alter or replace almost every core feature of the ACA marketplace: the individual and employer mandates, the Essential Health Benefits (EHBs) that every plan must cover, the subsidy schedule and eligibility structure. But... to be approved by HHS, a waiver proposal has to meet these criteria:
The senior Democrat on the panel, Senator Patty Murray of Washington, said: “Threading this needle won’t be easy. But I do believe an agreement that protects patients and families from higher costs and uncertainty, and maintains the guardrails in our current health care system, is possible.”
(1) The proposal will provide coverage to at least a comparable number of the state's residents as would be provided absent the waiver; (2) the proposal will provide coverage and cost-sharing protections against excessive out-of-pocket spending that are at least as affordable for the state's residents as would be provided absent the waiver; (3) the proposal will provide coverage that is at least as comprehensive for the state's residents as would be provided absent the waiver; and, (4) the proposal will not increase the Federal deficit.The state seeking a waiver has to provide actuarial analysis and supporting data -- and convince the CMS Actuary that the analysis is sound.
The main Senate repeal bill, the BCRA, nominally maintained the ACA's EHBs, out-of-pocket maximums, and other consumer protections, but essentially knocked down the guardrails in the innovation waiver process. As Timothy Jost noted, the amended waiver provision required only that states "provide for alternative means of, and requirements for, increasing access to comprehensive coverage, reducing average premiums, and increasing enrollment.” It also basically stripped HHS of its authority to deny approval to a waiver application. While "more flexibility for states" sounds anodyne, Democrats have good cause to be wary.
One point of consensus among the insurance commissioners and governors testifying before the HELP Committee this week is that the waiver process should be faster. That's in large part because states at this point of maximal market stress see an intense need for reinsurance, and the Trump administration HHS has actively encouraged waiver proposals that seek partial federal funding for such programs -- on grounds that they reduce premiums and therefore federal spending on premium subsidies. Alaska has had a waiver for such a proposal approved in July, and Minnesota has one pending.
How exactly could the waiver process be sped up? ACA Section 1332 allows HHS up to 180 days to consider a waiver. Once a proposal is submitted, the federal government must provide a public notice and comment period which should "reflect the complexity of the proposal and in no case can be less than 30 days." As for the material submitted, it must include "actuarial analyses and actuarial certifications, economic analyses, data and assumptions, targets, an implementation timeline, and other necessary information...".
I asked Emma Sandoe, a spokesperson at HHS from 2012 to 2014, currently a grad student in public health at Harvard, whether the current six month time frame for waiver approval is unreasonable. As a point of departure, I noted that the Congressional Budget Office often scores complex legislation very quickly -- for example, its analysis of the American Health Care Act, the House ACA repeal bill, came out a week after the bill was introduced.
True, Sandoe allowed, but "CBO analysis is done a macro, larger modeling scale. HHS is looking at the legality of things and getting into the nitty-gritty...how the proposal might affect individualized populations."
Indeed, HHS requires analysis of a waiver proposal's effects on sub-populations must be analyzed. For example, under "coverage," requirements are as follows:
Assessment of whether the proposal covers a comparable number of individuals also takes into account the effects across different groups of state residents, and, in particular, vulnerable residents, including low-income individuals, elderly individuals, and those with serious health issues or who have a greater risk of developing serious health issues. Reducing coverage for these types of vulnerable groups would cause a waiver application to fail this requirement, even if the waiver would provide coverage to a comparable number of residents overall. Finally, analysis under the coverage requirement takes into account whether the proposal sufficiently prevents gaps in or discontinuations of coverage.Sandoe also pointed out that a federal agency's assessment of a waiver proposal "isn't like grading a paper. It's an iterative process with staff-level conversations happening regularly."
Bottom line: "I don't see any way to get around the fact that it takes a while to do these things, without sacrificing important existing guardrails."
In more established waiver processes, such as for Medicaid optional programs, which states have been using for a long time to tailor their Medicaid programs, Sandoe noted, "CMS would often create cookie cutter forms for states that want to do the exact same thing. 'If you want to do x, here is the form, here is what you should put in'"...but the track record is not yet in place for ACA innovation waivers, only one of which has been approved so far.
So how could the process be streamlined? "The administration can be clear in what they're looking for and what they'd approve and what needs to be done on a state-by-state level." Sandoe returned to the school paper metaphor: "If you just say 'write an essay about x' that's not as effective as providing a rubric of how you grade things -- with a rubric as clear and detailed as possible."
It should be noted that a reinsurance program in of itself is not likely to have negative or unintended effects on any population groups. In lowering premiums, it should strongly benefit those who need the individual market and don't qualify for subsidies. By making insurance more affordable for the unsubsidized, reinsurance improves the risk pool, which benefits all parties. And there are plenty of precedents -- in state programs implemented pre- and post-ACA implementation, and in the national program that helped hold premiums down from 2014-2016. Further, HHS actively encouraged states to submit such proposal in guidance issued in March of this year.
In short, speed in the innovation waiver approval process seems more a matter of administrative will than Congressional action.
UPDATE, 9/12: In an op-ed co-written with former Senate majority leader Bill Frist, one of those Republicans who grew conspicuously sane upon leaving elective office, Andy Slavitt comes out in favor of cutting 1332 approval time to 90 days.
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