Hickenlooper-Kasich health care proposal calls for retaining individual mandate, funding CSRs

DENVER – Colorado Gov. John Hickenlooper’s health care reform proposal put together with a bipartisan panel of governors implores Congress to keep the individual mandate under the Affordable Care Act in place while work is done to further stabilize insurance marketplaces and make the health care law feasible in the long run.

Hickenlooper, a Democrat, and Republican Ohio Gov. John Kasich unveiled the proposal on Thursday after months of crafting that was done with governors from Nevada, Pennsylvania, Alaska, Virginia, Louisiana and Montana.

They group sent their proposal to majority and minority leaders in the House and Senate on Thursday, and Gov. Hickenlooper hosted a news conference to discuss the proposal at the state Capitol in Denver. Watch it in full in the player below or by clicking here.

For starters, Hickenlooper and the governors advise that Congress retain the individual mandate under the Affordable Care Act, which requires people to have insurance through their employer or the ACA lest they face a penalty, “until it can devise a credible replacement.”

The governors admit the mandate it “unpopular,” but say it’s “perhaps the most important incentive” for market stabilization because it encourages healthy people to buy insurance and not gamble on whether or not they will need coverage each year.

“Until Congress comes up with a better solution—or states request waivers to implement a workable alternative—the individual mandate is necessary to keep markets stable in the short term,” the governors wrote.

The other immediate step the panel asks for is to have Congress and the White House commit to funding the cost-sharing reduction payments through at least 2019—pointing out that the National Association of Insurance Commissioners, National Governors Association, and U.S. Chamber of Commerce have all said doing so is “an urgent necessity.”

The letter asks Congress “to put to rest an uncertainty about the future of CSR payments” by committing federal funding to them through 2019, and says that since CSR costs are already included in the budget, appropriating them wouldn’t have any adverse consequences to the budget’s bottom line.

The Congressional Budget Office said last month that not making the CSR payments—which help offset coverage costs for larger insurers who have to treat more sick people—would increase the federal deficit by nearly $200 billion over the next decade and lead to double-digit percentage yearly premium increases.

In a further effort to try and keep insurance companies from leaving state marketplaces, the governors ask Congress to create a “stability fund” for at least two years—something that has recently been proposed in Congress as well—in order to help stabilize marketplaces in struggling states.

A part of that would mean having Congress encourage insurers to provide more plans in rural counties. The governors’ letter proposes exempting insurers from a federal tax in an effort to get more to re-enter underserved areas. Estimates for 2018 show that 1,400 counties across the country will have only one insurance company to pick plans from next year.

The proposal also attempts to put more of a say in how the ACA is implemented in each state in the hands of each state.

“The options can be considered alone or assembled into a comprehensive strategy to achieve the interrelated goals of maximizing market participation, promoting appropriate enrollment, stabilizing risk pools, and reducing cost through coverage redesign,” the letter says.

“Different states will take different approaches. We all agree on and support the proposals contained in this letter, but each state will choose the state-based approaches that best fits their individual situation.”

The governors ask Congress to modify risk-sharing pools and ask Health and Human Services to give states the option to develop their own alternatives to essential health benefits allowed under Section 1332 of the ACA—which allows states to waive certain provisions of the health care law.

Among the things those “state innovation waivers” can be applied to are individual and employer mandates, essential health benefits, and tax credits and subsidies.

“We recommend HHS streamline and coordinate the waiver submission and approval process, including an option for states to easily build on approved waivers in other states, and an option to fast-track waiver extensions,” the letter says.

Hickenlooper said at the 11 a.m. news conference discussing the proposal that he and four other governors would present the proposal to the Senate next Thursday.

He added that the proposal was simply the “first step” in a long list of things that need to be done to fix the health care law, but said he and the other governors believed the individual marketplace needed to be addressed first thing.

“Is it going to fix all that is broken in our health care system? No, that’s not going to happen,” Hickenlooper said. “This is taking a big bite out of a very large problem.”

“It’s a big step in that it shows that we can make compromises across party lines,” Hickenlooper continued. “Gov. Kasich and I have some very different opinions about some of these things, but we are really recognizing and trying to be a model by which you can find compromises around these kinds of things.”

He said he and the governors had talked to at least a dozen governors, but said that “in the end, it’s the Senate and the House” that will be tasked with making changes.

Hickenlooper said he’d talked to Sen. Cory Gardner, R-Colo., and “a few” other senators, as well as the House “Problem Solvers” caucus. He also said that all of Colorado’s congressional delegation was “aware” of the plan.

“There’s room for discussion on this. No one is coming out and saying this is a non-starter,” Hickenlooper said. “We’re going to listen to questions and concerns [from the Senate], and try and address them honestly.”

And he said that their plan wasn’t a pipe dream either.

“We’re not trying to start a revolution here. These are very conscious, pragmatic efforts,” Hickenlooper said. “Pretty much every elected official holds that as their long-term goal: More coverage, higher quality, less cost.”

Flash analysis from the nonpartisan Colorado Health Institute found that Hickenlooper and Kasich’s plan “contains some good, pragmatic ideas.”

It said that “some points in the plan are untested or unfunded, but none of the ideas seem to be without merit.”

Read more of CHI’s analysis here.

Adam Fox of the Colorado Consumer Health Initiative said the governors’ proposal was a good step in the right direction.

“What we see here is a common-sense, bipartisan plan that Congress really should be considering,” he said. “If we’re able to help insurers sort of offset those unexpected costs, it means that we’ll see fewer drastic spikes in premiums.”

He also echoed Hickenlooper’s sentiments that some of the issues have already been discussed by both parties and are things they each get behind.

“Most of these ideas have been discussed in one way, shape, or form, and have bipartisan support,” Fox said. “It’s not necessarily that revolutionary, but it’s trying to bring the parties together to work on something a little more constructive.”

Print this article Back to Top