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May 21, 2018

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Congress repeals individual mandate while eyeing health care fixes for 2018

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Alex Brandon / AP

In this May 18, 2017, file photo, the Healthcare.gov website is seen on a laptop computer, in Washington.

Republicans are looking to 2018 to pursue possible fixes for the Affordable Care Act, though Nevada’s health exchange director says these proposals are unlikely to reverse the potential impacts of repealing the individual mandate.

Congress passed its sweeping tax overhaul this week, including repeal of the individual mandate by 2019. The mandate created a tax liability for those who failed to purchase health insurance, amounting to $695 per year or 2.5 percent of income, whichever was greater.

Republican Sens. Lamar Alexander of Tennessee and Susan Collins of Maine said in a statement today that they’ll pursue possible fixes for the ACA after Jan. 1, when Congress pursues a full budget plan.

But the potential fixes are not enough to offset the possible negative impacts of repealing the individual mandate, said Heather Korbulic, executive director of the Silver State Health Insurance Exchange.

The move will discourage healthier people from signing up for insurance, increase the amount of risk in the insured population and push premium payments higher for those who do not qualify for subsidies, she said.

The individual mandate repeal was included in the Senate’s version of the GOP’s tax reform legislation and carried over into the final bill.

Fewer than 73,000 Nevada residents paid the individual mandate’s tax penalty, out of fewer than 1.4 million returns filed for tax year 2015, according to the most recent IRS data available.

Alexander is one of the lawmakers sponsoring a measure to ensure cost-sharing reduction payments are made for two years.

The payments help insurance companies stabilize costs and have been at risk under President Donald Trump’s administration, which has characterized the payments as “bailouts.”

Alexander is also supporting an effort to support reinsurance programs — basically insurance for insurance companies.

Healthcare consulting firm Avalere Health says both bills are two-year, temporary programs that would reduce premiums.

“Together, funding for reinsurance and paying the cost-sharing reductions would significantly reduce premiums,” Chris Sloan, senior manager at Avalere, said in a statement. “However, those effects only continue as long as the federal funding keeps flowing.”

Korbulic said about 87 percent of exchange consumers receive subsidies. Those who do not qualify for subsidies, an estimated 13,000 mostly middle-class Nevadans in 2017, took the full impact of an average 38 percent premium increase.

“With the increase in premiums, we’ll see the subsidies increase, and most consumers will likely not be impacted,” she said. “But what we’re seeing this last enrollment period is a pretty significant cliff from people who are subsidized and those who are unsubsidized. So this will continue to be a problem for people who are not eligible for subsidies.”

Korbulic said it’s a little too late for the Alexander-Murray bill, which funds cost-sharing reduction payments for two years.

“I don’t anticipate that will have much of an impact to stabilize the marketplace nor will it really offset any of the damage from the individual mandate going away,” she said.

Korbulic said the bill funding reinsurance programs, introduced by Collins, could be more helpful in offsetting damage from individual mandate repeal. Collins said in a statement today that leadership appears to be on board with pursuing fixes.

“This afternoon Speaker Paul Ryan called me and said that the House remains committed to passing legislation to provide for high-risk pools and other reinsurance mechanisms similar to the bipartisan legislation I have introduced,” Collins said.

“He pointed out that by waiting until early next year, we will be able to use a new (Congressional Budget Office) baseline that will result in more funding being available for reinsurance programs that have been proven effective in lowering premiums while protecting people with pre-existing conditions like diabetes, heart disease, and arthritis,” Collins said.

Korbulic said that though there isn’t much solid data on the impact repealing the mandate will have, particularly in Nevada, the requirement was part of the three-legged stabilization stool that is the ACA. She said experts are weighing data from the Congressional Budget Office and other sources in predicting the impact.

“This will likely result in a decrease in insured Nevadans and will likely increase premiums,” she said.

The Nevada exchange had 46,156 consumers enrolled as of Dec. 9, which does not include the last week of the enrollment period or people who automatically re-enrolled. There were 37,790 Nevada residents signed up at this time last year, with total enrollment reaching 89,061.

The Centers for Medicare and Medicaid Services will release final numbers Thursday or Friday, Korbulic said. To increase data availability, among other reasons, the state is looking at switching to its own platform for enrollment instead of using the healthcare.gov website, which Nevada joined after its own multimillion-dollar system failed.

“We don’t have any kind of immediate insight into the data, who we’ve enrolled,” she said. “We would have the ability to look at any moment in time and see who we’ve outreached to and who we’ve successfully enrolled and what areas we need to better focus our energy and budgets on.”

The exchange has issued a request for information that closes in mid-January. Korbulic said the exchange is working to issue a request for proposals in March. Korbulic said a state-run platform could avoid problems from last-minute changes from the Centers for Medicare and Medicaid Services.

Late on Friday, this year’s enrollment deadline, CMS decided to end its practice of allowing customers time beyond the deadline to finish applications they’d started before the end of the shortened open enrollment period. Korbulic said it’s unclear how many Nevada residents were impacted by the change.

Korbulic said the exchange, the Division of Insurance and the office of Gov. Brian Sandoval have started convening for preliminary discussions on how to retain carriers as well as limit marketplace disruptions and their impact on consumers.

“Part of that would lead into our transition in tech,” she said. “We’ve seen this last year quite a bit of uncertainty coming from federal policymakers resulting in this truncated open enrollment period and some last-minute policy changes from CMS that really, when it comes down to it, left Nevadans out of being able to enroll this year.”