In response to a request by Senator Lamar Alexander, the Connecticut Insurance Commissioner has recommended legislative action be taken to continue cost-sharing reduction payments to insurers at least through the end of 2018.
Connecticut Insurance Commissioner Katharine Wade made her recommendations to Alexander, chairman of the Senate, Health, Education, Labor and Pensions Committee, as that committee is looking at ways of keeping premiums affordable for people buying individual plans on the exchanges.
Insurers have until Wednesday, Sept. 20 to finalize premium rates for the Affordable Care Act exchanges, which will be published on Healthcare.gov on September 27.
The committee has heard from state insurance commissioners and governors. On Tuesday, Senators will get input on giving states more flexibility over plans, and on Thursday, they will hear from stakeholders including Marshfield Clinic CEO Susan Turney and Anthem Vice President Robert Ruiz-Moss.
During the first hearing, Alexander suggested giving assurance of CSR payments through 2018, while healthcare groups such as America's Health Insurance Plans and the American Hospital Association said by letter that insurers need at least two years of a CSR payment guarantee to keep the market stable.
In Connecticut, exchange carriers have been asked to provide a supplemental rate filing that assumes CSRs will not be paid, Wade told Alexander in the Sept. 8 letter.
"We have required the carriers to apply the rate increase to the silver plans on the exchange," Wade said. "The supplemental average rate increase for non-payment of CSRs is 16.7 percent in Connecticut."
Wade also recommends legislation to fund the reinsurance program, which was established under the ACA. This would allow insurers to offset the cost of high cost claims and to lower premiums, she said.
Connecticut has in place the infrastructure to quickly reestablish a reinsurance program, Wade said.
Wade also recommended allowing more flexibility in plan design including a lower-priced copper plan that would include essential benefits at a greater cost sharing for consumers.
Section 1332 waivers allowing states to waive some ACA mandates, should become budget neutral, she said. This is so states don't have to put money upfront when applying for a waiver. Instead of legislative approval, it should be a gubernatorial request, Wade said.
States should be giving the flexibility for rating standards, she said.
The actuarial value calculator, which limits insurers ability to offer flexible benefits and cost sharing designs, should be eliminated, Wade said. Currently insurers must make annual changes to their existing plan designs due to annual changes in the AV calculator.
She also recommended a continued moratorium on the health insurance tax, which is adding 3 percent to premiums in 2018.
The biggest factor in healthcare costs is from medical and pharmacy increases, which account for a 10.5 percent rise in premiums, said Wade, who suggested price transparency and continued payment innovation models to lower costs.