Governors are calling for multiyear funding for cost-sharing payments and for federal assistance to launch reinsurance programs as part of a bipartisan measure to stabilize the individual insurance market.

The conversation among governors and senators in a Sept. 7 hearing before the Senate Health, Education, Labor and Pensions Committee echoed what insurance commissioners told the same panel earlier in the week about how to bring stability to the individual insurance market before the fifth open enrollment period.

The committee’s leaders hope to advance a narrow, bipartisan package before insurance companies finalize contracts with the federal government for the 2018 coverage year on Sept. 27.

HELP Chairman Lamar Alexander suggested the contours of a package could include funding for the health care law’s cost-sharing reduction payments, which the state officials have pleaded for, and additional restructuring of the law through waivers or through allowing certain consumers to buy basic catastrophic coverage.

The Tennessee Republican has sought to fund the cost-sharing payments through 2018, but state officials told his panel last week they should be funded at least though 2019 to provide additional stability for the marketplace. Alexander said a package would need to include more than just that funding to win support from Republicans.

“It’s pretty easy to be for extending the cost-sharing payments,”Alexander said. “To get a Republican President, a Republican House, and a Republican Senate just to vote for more money won’t happen in the next two or three weeks unless there’s some restructuring.”

Reinsurance — a program to help insurers cover high-cost patients — has become a rallying cry after the two days of hearings, but Alexander warned that recreating a federal program in just a few weeks was unlikely. The 2010 law had a reinsurance program that expired.

Instead, Alexander asked state governors and regulators how Congress could make it easier for them to set up their own reinsurance programs.

Alexander said he hopes to bring a proposal to Senate Majority Leader Mitch McConnell of Kentucky and Minority Leader Charles E. Schumer of New York that has a broad consensus of between 25 and 30 bipartisan senators within the next 10 days.

He ruled out repealing the health care law’s taxes or taking on other costly initiatives, since it’d be difficult to find a way to pay for that on a short timeline.

Searching for a Vehicle

If Alexander can convince the Senate leaders to bring up a stabilization package, it’s not clear what legislative vehicle it might ride on, especially after the Senate voted on Sept. 7 for a package that included emergency spending for hurricane relief as well as a debt limit suspension and a stopgap spending bill to keep the government funded through Dec. 8. He said he would focus on the policy aspects with his Democratic counterpart, ranking member Patty Murray of Washington. 

“That’s not my job,” Alexander said. “My job is to work with Sen. Murray and all these other senators and see if we can get a small, limited bipartisan package that stabilizes the market, lowers premiums and sends a signal to the country that we’ve broken a seven-year political stalemate on health insurance and we’re beginning to solve the problem.”

Sen. Chris Murphy, D-Conn., acknowledged the debt limit deal punted a clear opportunity to advance a bipartisan stabilization package this month. Exploring whether the Centers for Medicare and Medicaid Services could revise states’ rates midway through 2018 if the health care law changes might be worthwhile, he added.

“Lamar is still very focused on getting something done by the end of the month,” he said. “If not, we have plenty of vehicles to get something to the finish line in December.”

Sen. John Cornyn, the No. 2 Senate Republican, suggested the upcoming reauthorization of the Children’s Health Insurance Program could be an option for adding bipartisan health reforms. CHIP funding expires at the end of the month,

“I always thought that would be another vehicle to address health care reform, and assuming we could get something going on a bipartisan basis, that that would be an opportunity to do that,” the Texas Republican said.

Part of the push for a bipartisan stabilization package is to ensure that consumers nationwide have at least one policy to purchase on the exchanges for 2018. On Sept. 6, Optima Health announced it would withdraw from some counties in Virginia, leaving them “bare” for now and perhaps putting more pressure on Congress to pass a package this month. The insurer pointed to the withdrawal of other insurers in the state and the lack of clarity from Washington as a reason for its retreat.

The governors agreed that funding the cost-sharing reduction payments was a top priority for keeping premiums low and halting insurers from departing the exchanges. But they also said bringing more young and healthy people into the market and launching some sort of reinsurance program were also important steps for stabilization.

The support from state regulators and governors toward reinsurance is pushing it to the forefront of the debate, but one question surrounding the program is whether it should be run at the state or federal level.

The governors suggested states would ultimately be the best leaders of the program, but could require some initial help from the federal government

“If you give us a year, we could run that ourselves,” said Gov. Bill Haslam, a Republican from Tennessee.

Other governors, like Democrat Steve Bullock of Montana and Republican Charlie Baker of Massachusetts, said states would need additional time to figure out the details associated with a shared reinsurance program, but that it would be possible.

Many of the changes under discussion around health care law waivers will likely be procedural, since Republicans could risk alienating Democrats if they sought to weaken the guardrails ensuring a waiver doesn’t make coverage less comprehensive or expensive for consumers.

Alexander has also suggested allowing people over the age of 30 to buy basic copper-level insurance plans on the exchanges, which are currently only available to people below that age.

Dark Outlook for Broad Health Overhaul

Pressed by Sen. Al Franken, D-Minn., a Republican governor at the hearing poured cold water on a proposal from GOP Sens. Lindsey Graham, of South Carolina, and Bill Cassidy, of Louisiana that would allow states to take federal money and essentially design their own health insurance markets.

“This particular proposal, in part because of the way it’s designed, has major consequences for a state like Massachusetts,” Baker said.

Graham and Cassidy are working on finalizing the legislative text of their proposal so it can be analyzed by the Congressional Budget Office.

Cornyn said it was “premature” to know the prospects of the plan without those details. Cassidy and Graham face a tight timeline, since the Senate parliamentarian has advised the reconciliation instructions focusing on health care that were passed earlier this year would expire at the end of the month and scoring the legislation could take at least two weeks.

Cassidy told reporters that Vice President Mike Pence has been involved in the effort to wrap up work on the bill.

Sen. John McCain, R-Ariz., whose July vote helped scuttle the Republican effort to roll back the health care law, offered some support for the idea this week, but later emphasized he wants the process to move through regular order.

“I think we’ve demonstrated that we don’t have 51 votes for it,” Cornyn said of voting on the repeal effort again before the end of the month. “So that indicates it would have to be some sort of a bipartisan bill, so I don’t think that’s as important as it was.”