[Pages S5899-S5900]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS ON JUNE 13, 2019

By Ms. COLLINS (for herself and Mr. Manchin):
S. 1868. A bill to provide support to States to establish invisible
high-risk pool or reinsurance programs; to the Committee on Finance.
Ms. COLLINS. Mr. President, rising health care costs are a major
concern for millions of Americans--whether it's expensive health
insurance premiums, high out-of-pocket expenses, or soaring
prescription drug costs. In the individual market, where 11.5 million
Americans who do not have employer-sponsored insurance have to go to
buy their insurance--including the 78,000 individuals in Maine--
premiums continue to rise exponentially.
With this in mind, I am introducing the Premium Reduction Act of 2019
with my good friend and colleague, Senator Joe Manchin. Leading health
care experts at Oliver Wyman indicate that our legislation would lower
average health insurance premiums for consumers in the individual
market by as much as 30 percent. In addition, more than a million more
individuals would have health insurance that they now lack.
Data from the Kaiser Family Foundation show premiums for the
benchmark ``silver'' plans under the Affordable Care Act (ACA) are
nearly 75 percent higher than they were when the ACA went ``live'' in
2014. While individuals who are eligible for the ACA's premium tax
credits are shielded from these increases, the price of these silver
plans is out of reach for many who are not eligible for these tax
credits. Even ``bronze plans''--the lowest cost individual market
policies available through the ACA exchanges--have become unaffordable
for those without subsidies. Bronze plan premiums have gone up so much
that they now exceed those charged for silver plans in 2014, despite
the fact that these bronze policies have far higher deductibles and
out-of-pocket expenses.
Individuals who make 400 percent or less of the federal poverty level
get a federal tax credit to help defray the monthly premium cost. But
individuals who make just one dollar over that level get no help at
all, and must pay the full premium on their own. These premiums are
simply unaffordable for middle-income families.
The difference in premiums is shocking for many families. For
example, in Aroostook County, Maine, a 60 year-old couple enrolled in a
silver plan will pay about $6,500 for coverage if they earn 400 percent
or less of the federal poverty level: in other words, as long as they
earn less than roughly $66,000. But if they earn just a dollar more,
they will lose their eligibility for a premium tax credit, and will
have to pay the entire premium themselves--an incredible $36,500!
One step Congress could take to help alleviate the rising cost of
premiums in the individual health insurance markets is to provide
States with additional flexibility and support to design State-based
stabilization programs that would help offset the costs of covering
consumers with high medical expenses. Once these costs are covered, the
premiums needed to provide insurance to the rest of the population can
be set at a much lower level. Thus far, seven states--Maine, Alaska,
Maryland, Minnesota, New Jersey, Oregon, and Wisconsin--have
established such programs. According to the health care experts at
Avalere, the programs in these seven states have reduced premiums in
the individual market by 20 percent compared to what they otherwise
would have been, and saved the federal government nearly $1 billion in
funding in the first year, which was returned to the states in the form
of ``pass through'' funding.
Under the Premium Reduction Act, $5 billion would be available
annually over three years to support states that operate stabilization
programs under section 1332 of the Affordable Care Act. In addition,
$500 million is provided to assist states with planning the design of
their own stabilization program, and there is a ``federal fallback''
for 2021 to give states time to apply for waivers under section 1332.
It is important to note that our proposal does not change in any way
the ACA's essential benefits requirements or its protections for
individuals with pre-existing conditions.
The bill provides three options for expedited review so that states
could quickly stand-up their own programs using the existing waiver
process under section 1332 of the Affordable Care Act:
First, a state can demonstrate that their program is an ``invisible
high-risk pool'' in keeping with the design pioneered by Maine early in
this decade and used as a template by Alaska more recently;
Second, a state can show that its program fits within the parameters
of the ACA's transitional reinsurance program, which expired at the end
of 2016; or
Third, a state can submit what can be described as a ``copycat''
application based on another state's program that has already received
approval.
In lieu of these three expedited approval options, a state may seek
approval of a program of their own design. Regardless of the option
they select, all states operating qualifying stabilization programs
would be eligible to receive an allocation from the funding provided by
the bill. States may also add funds from other sources to the mix.
In addition, in 2021, states that do not wish to establish their own
stabilization program may instead receive funding through the ``federal
fallback'' that I described a few moments ago.
Finally, the bill would also extend the section 1332 ``feedback
effect'' to states that receive funding through the federal fallback
provision. This will ensure that the benefits of lower premiums are
felt in all states as quickly as possible, giving states ample time to
seek and obtain approval of their own programs under the waiver
process.
In a recent letter to me endorsing our bill, the National Association
of Insurance Commissioners stressed that ``[alction must be taken to
make coverage more affordable or we will see even higher uninsured
rates, more people move to less regulated plans, and sicker individual
market pools.'' The NAIC's letter goes on to note the success of
stabilization programs at the state level, stating that such programs
are ``a cost-effective way to significantly reduce individual market
premiums'' that can expand coverage and make it more affordable
unsubsidized individuals and families. The NAIC closed its letter with
a call to implement such programs nationwide.
Also, a consortium of health care providers, insurers, and
stakeholders--joined by the U.S. Chamber of Commerce--circulated a
letter recently to Senate and House leadership urging them to adopt a
proposal like the one we are introducing as a ``commonsense solution to
significantly lower premiums.'' In their letter, they stressed that
premium reduction programs can ``help cover the costs of people with
significant health care needs and improve the affordability of health
care coverage,'' especially for those who are not eligible for
subsidies.

[[Page S5900]]

Mr. President, I ask that these letters be entered into the Record
immediately after my remarks.
Efforts at further reform of America's health care system have been
the source of frustration and division in this chamber. At the same
time, many members of both parties are committed to reducing health
care costs and expanding access to quality, affordable coverage. The
programs adopted by seven pioneering states have a proven track-record
in reducing premiums for consumers and would make policies in the
individual market more affordable. The bill Senator Manchin and I are
introducing today would help extend and fund these successful models to
every state that chooses to participate, helping to reduce premiums for
the 11.5 million Americans who get their insurance in the individual
market nationwide. I urge my colleagues to support our bill.

May 28, 2019.
Dear Leaders McConnell and Schumer, Speaker Pelosi and
Leader McCarthy: As providers of health care and coverage to
hundreds of millions of Americans, we write to you to urge
prompt action to lower health insurance premiums. The
individual market is a critical source of coverage for
millions of Americans, helping them to access care.
Unfortunately, however, individual market premiums are often
unaffordable for many middle class families who do not
receive any financial assistance. With health insurers
finalizing their premium rates for 2020, the time is now for
Congress to establish a premium reduction/reinsurance program
to help cover the costs of people with significant health
care needs and improve the affordability of health care
coverage.
A reinsurance program is a commonsense solution to
significantly lower premiums, which would greatly improve
access to coverage and care. Independent analyses, including
ones by Oliver Wyman and Avalere Health, show that a premium
reduction/reinsurance program could reduce premiums by up to
20% while preserving the comprehensiveness of coverage,
primarily helping those who are not subsidy eligible.
We understand that there are numerous efforts in Congress
underway to establish a premium reduction/reinsurance
program, and we are happy to work with all parties towards a
final bill that will improve the individual market for 2020
and beyond.
We urge you to deliver on the promise to reduce premiums
for millions of deserving Americans and their families so
they can access the care they need. We look forward to
working with you in support of this promise.
Sincerely,
America's Health Insurance Plans.
American Academy of Family Physicians.
American Benefits Council.
American Hospital Association.
American Medical Association.
Blue Cross Blue Shield Association.
Federation of American Hospitals.
U.S. Chamber of Commerce.
____

National Association of Insurance Commissioners and The
Center for Insurance Policy and Research,
June 12, 2019.
Hon. Susan Collins,
Senator, U.S. Senate,
Washington, DC.
Dear Senator Collins: On behalf of the members of the
National Association of Insurance Commissioners (NAIC) we
write to express our support for your continued efforts to
help improve the individual health insurance markets in our
states through the funding of state stabilization programs.
While many states have seen more stable premium rates and
carrier participation over the past two years, the fact
remains that in all states premiums continue to be
significant for those who do not receive federal subsidies.
This has resulted in shrinking individual markets and less
stable risk pools. Action must be taken to make coverage more
affordable or we will see even higher uninsured rates, more
people move to less-regulated plans, and sicker individual
market pools.
This is why commissioners from across the political
spectrum have contacted their congressional delegations,
testified before House and Senate committees, and urged
federal policymakers to take immediate action to stabilize
the individual health insurance market. In particular, we
support your proposal to provide federal funding for state
stabilization programs, as well as for grants to help states
develop innovative solutions through Section 1332 waivers. We
also support the creation of a federal program to assist
consumers in states unable to implement their own program
quickly.
State reinsurance programs and invisible high-risk pools
have already proven their effectiveness. According to a
recent Avalere study, the seven states that have already
implemented a program through a Section 1332 waiver using
state funds have reduced premium by almost 20%. Additional
federal funding, as outlined in your bill, would provide even
more benefit to consumers, and extend the benefits to all
states.
Creating a federal market stabilization program is a cost-
effective way to significantly reduce individual market
premiums, thus making coverage more affordable to
unsubsidized individuals and families and growing the
individual market pool. We have seen it work in the handful
of states that have implemented such programs; it is time to
implement it nationwide.
Sincerely,
Eric A. Cioppa,
NAIC President, Superintendent, Maine Bureau of Insurance.
Raymond G. Farmer,
NAIC President-Elect, Director, South Carolina Department
of Insurance.
David Altmaier,
NAIC Vice President, Commissioner, Florida Office of
Insurance.
Dean L. Cameron,
NAIC Secretary-Treasurer, Director, Regulation Idaho
Department of Insurance.

____________________