Governors Testify That Path Forward for Individual Markets Must Be Bipartisan, Flexible

A bipartisan group of governors from 5 states testified to a Senate committee on ways to stabilize the Affordable Care Act (ACA)'s individual health insurance market and bring down premiums for their residents.

Senator Lamar Alexander, R-Tennessee, chairman of the Committee on Health, Education, Labor and Pensions, noted that a hearing the day prior had invited state insurance commissioners to testify on ways to stabilize the market and reduce premiums, but now the committee would listen to governors’ ideas on these topics. Ranking Member Senator Patty Murray, D-Washington, agreed that soliciting input from governors and focusing on the common ground would help Congress pass a timely, bipartisan fix to stabilize the markets.

Each governor was given time to make a short speech outlining their suggestions for stabilization. Republican Tennessee Governor Bill Haslam laid out 3 components that he supported in bipartisan legislation: funding the cost-sharing reduction (CSR) payments to insurers, implementing a short-term reinsurance program, and providing more flexibility to states. He noted that Congress must commit to containing the “unsustainable” costs of healthcare, but that “failure to address the immediate stabilization needs while Congress works on the bigger issue will almost certainly result in collapse of the market.”

Montana's Democrat governor, Steve Bullock, concurred that stabilizing the individual market is an urgent priority. “The only way to eat an elephant is one bite at a time,” he said, and even a small step like funding the CSR payments would be a significant step towards stabilization. He noted that despite the diverse perspectives of the 5 governors testifying, they were unified in insisting that the CSR subsidies be continued.

Next to testify was Massachusetts Governor Charlie Baker, a Republican, who outlined several lessons he had learned from Massachusetts’ efforts to ensure near universal coverage. First, bipartisan cooperation is essential. Second, Congress must provide certainty by funding the CSR payments. Next, states should have expanded latitude to submit 1332 waivers that provide flexibility on essential health benefits, benefit design, and budget neutrality. Finally, he called on Congress to take action to bring down rising drug costs.

Colorado Governor John Hickenlooper, a Democrat who recently worked with other governors to draft a bipartisan stabilization plan, called for a “common sense set of solutions” in his testimony. These solutions included strengthening federal risk sharing and creating more choices in counties with just 1 insurer, among other ideas. Importantly, the federal government must work with the states, not against them, to make marketplaces more stable and care more affordable. Otherwise, he said, the process is like climbing one of Colorado’s mountains in winter without a parka: “it can’t be done.”

Finally, Utah's Republican governor, Gary Herbert, encouraged Congress to “get past the healthcare impasse” by empowering states with greater flexibility and implementing market-oriented incentives to encourage enrollment. He called for relieving the burden of regulations and restrictions placed on states by the federal government under the ACA.

“Returning control to the states is prudent policy, but it’s also prudent politics,” he concluded.

In each of the governors’ testimonies and in their responses to senators’ questions, there was a consensus that each state should have the flexibility to experiment with regulations based on its residents’ needs and then share those practices with other states. They also agreed on the need to address the rising costs of healthcare after immediate steps are taken to stabilize the market. For instance, Hickenlooper mentioned that the Colorado Accountable Care Collaborative had helped control costs while improving quality by creating medical homes, which other states could learn from.

As the hearing drew to a close, Alexander cautioned that not all of these ideas would make it into the short-term stabilization bill that is intended to be introduced in the coming weeks. A federal reinsurance pool, while mentioned by nearly all of the governors, could not reasonably be drafted into legislation within the next 10 days. Still, the feasible components can and should be made law as soon as possible, he said, considering the contentious debate over repealing the ACA that had divided Congress for the past few months.

“We’ve been so much at a stalemate on this that any small step that helps stabilize the market in 2018 will keep the premiums down, and that step would include some access to the CSRs,” Alexander said. Just as importantly, “it would be a signal to the country and the markets that we know what we’re doing, and a second and third step may be coming down the road.”