What Health Policy Experts Think Of A Key GOPer’s Vision For O’Care Transition

Sen. Lamar Alexander, R-Tenn., chairman of the Senate Health, Education, Labor, and Pensions Committee, and other senators head to the Senate chamber on Capitol Hill in Washington, Wednesday, June 29, 2016, to vote a... Sen. Lamar Alexander, R-Tenn., chairman of the Senate Health, Education, Labor, and Pensions Committee, and other senators head to the Senate chamber on Capitol Hill in Washington, Wednesday, June 29, 2016, to vote as a rescue package for debt-stricken Puerto Rico, just two days before the island is expected to default on a $2 billion debt payment. (AP Photo/J. Scott Applewhite) MORE LESS
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Earlier this week, Sen. Lamar Alexander (R-TN) did something few Republicans have dared to do since the election: go into some detail of how he would like to see lawmakers go about transitioning into a replacement for an Affordable Care Act.

His vision, which he outlined in a speech on the Senate floor Tuesday, is earning measured praise from some health care policy experts for at least acknowledging that Republicans may have to keep some aspects of Obamacare alive while they work on an alternative to avoid causing major chaos to the individual market.

“If they don’t want to crash the system this is the only way they can proceed, which is very carefully,” said Timothy Jost, a health law specialist at the Washington and Lee who is supportive of Obamacare. “Not following President-elect Trump in trying to replace it in one hour, but rather by taking time to disassemble it, in a very thoughtful and careful basis.’

In his speech, Alexander proposed holding off on full repeal until an alternative has been offered, in likely a piecemeal fashion. In the meantime, he pitched a set of short-term measures that would keep insurers incentivized to stay in the marketplaces while a replacement could be hashed out. Those measures included maintaining certain subsidies to insurers promised by the Affordable Care Act, as well as a continuation of the Obamacare individual marketplaces, but with the option for consumers to use their tax credits on state-approved plans outside of the exchanges.

“These are standard, reasonable ideas,” said Joseph Antos, a health policy scholar at the right-leaning American Enterprise Institute, “which is a sign we’ve seen, not just from Sen. Alexander, but others in the Senate, especially, that they will go along with a repeal bill but as part of that they want to signal very strongly — either with an actual bill or signal very strongly — what will go in a mainstream replace bill.”

Congressional leaders have promised that in theory replacement measures will come after the law is repealed, but they have offered few details about what proposals are on the table or even the timing to expect them. This has prompted a fair number of Republicans to express their discomfort with repealing Obamacare without a replacement ready. Alexander has taken the next step of elaborating on his ideas for going from the ACA through a transition period and ultimately into a replacement.

“What Senator Alexander suggested leaves the Affordable Care Act entirely intact for some period of time, which goes further than other proposals out there,” Larry Levitt, vice president of the Kaiser Family Foundation, said.

As chair of the Senate Committee on Health, Education Labor and Pensions (HELP), Alexander stands to hold sway over the legislation that repeals Obamacare. The plan, once an initial procedural step passes in the House, is for the relevant House committees to write their own repeal legislation, before the Senate HELP and Finance Committees take their stabs at it.

“I am doing what I think the chairman of the HELP Committee ought to do in the middle of a debate about repealing and replacing Obamacare,” Alexander told reporters the day after his speech. “Obviously, I wouldn’t be making these suggestions if I didn’t think they had a good chance of representing the view of enough Republicans to help us get to 51 votes, but we’re still working on it.”

One of the most noteworthy proposals Alexander offered in the speech was the continuation on what’s known as cost sharing reduction (CSR) payments to insurers. The payments, which subsidize insurers for keeping out of pocket costs down for low income consumers, are among the measures the Affordable Care Act took to blunt the risk insurers face. They have also been decried by GOP lawmakers as “insurer bailouts” and the CSR payments are subject to a lawsuit brought by the House Republicans in 2014. Their fate remains in flux after a federal court ruled against them.

In his floor speech, Alexander proposed that lawmakers approve of a “temporary continuation” of the payments.

“We may have to agree to do some things for a two- to three-year period that we normally wouldn’t do in the long-term to make sure we give people the relief,” Alexander (R-TN) told TPM last month, when asked whether those kinds of measures were on the table.

In his speech, Alexander fashioned these measures not as bail outs, but part of a “rescue” mission.

“Maybe ‘rescue mission’ is the magic language. They have to do it, or it’s going to crash on their watch,” Jost said.

It’s not as clear the impact the other proposals he offered would have on the market, and what they would mean for consumers in the so-called “transition” phase. The effect of letting consumers use their ACA subsidies on non-marketplace plans will depend largely on how closely they resemble the current plans that are in line with the Obama administration’s interpretation of the 10 Essential Health Benefits, mandated by the Affordable Care Act.

“It’s one thing if he’s talking about ACA-compliant policies outside the marketplace,” Levitt said. If consumers were using subsidies on plans that followed basically the same rules, then Levitt predicted that could lead to a “perfectly stable situation.”

However, if Alexander’s vision includes the return of the kinds of plans states allowed before the ACA, such as ones that allow insurers to underwrite based on gender or pre-existing conditions, or plans that are short-term policies, Levitt predicted a situation that would be “very unstable and likely unworkable.”

“That would siphon off healthy people from the marketplace and likely would leave a very unstable insurance market, with premiums increasing and insurers exiting,” Levitt said.

Regardless, the direction appears toward a system where states have more control over what kinds of insurance plans are offered.

“What he is really trying to say is, ‘states should have most of the regulatory [oversight of] insurance markets, they’re closer to the market, they’re much better,’” Antos said.

However, some health policy experts warned of an attempt to pass the buck onto the states if the federal government failed to stabilize the marketplaces after repealing Obamacare.

“The rescue mission is something that [lawmakers] should be cheered on for, but we should watch carefully if they’re going to transfer blame and responsibility to the states,” Jost said.

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