Severe cuts to ACA enrollment assistance and marketing will further destabilize the marketplace

The federal Centers for Medicare and Medicaid Services (CMS) announced this morning that it is slashing funding for enrollment assistance and marketing that are essential to the stability of the health insurance Marketplace. The CMS action prompted Michele Johnson, executive director of the Tennessee Justice Center, to issue the following statement:

Politically-motivated sabotage of Americans’ health coverage must stop. Insurers have warned that full funding for enrollment assistance and marketing are essential to maintain the stability of the marketplace. Slashing that funding endangers the coverage of many of the most vulnerable people in Tennessee. Tennessee Insurance Commissioner Julie Mix McPeak has been asking Congress for months to put aside partisanship and ensure the stability of insurance markets. This latest blow makes the efforts of  Senator Lamar Alexander to craft a bipartisan plan for strengthening markets all the more urgent.

CMS announced August 31 that it is slashing funding for enrollment assistance by 41 % and for marketing by 90% during the enrollment period that runs from November 1 – December 15. This will skew the mix of people buying coverage on the marketplace to older, sicker individuals who are vigilant about obtaining insurance, because they understand its importance. Younger, healthier consumers are less knowledgeable about health insurance and therefore most need information and assistance. They are the ones who are most likely to be left uninsured as a result of today’s action. Navigators report that in prior enrollment periods, older and sicker consumers have signed up early, while last minute enrollments have been weighted more heavily toward the young and healthy. This phenomenon is particularly significant this year, because the enrollment period is shorter, and closes earlier, than in past years. Without a major outreach effort, many prospective consumers will be caught unawares and miss the enrollment window, creating a smaller, sicker pool. That risk is likely to deter insurers from offering coverage in Tennessee.

Experience in Tennessee confirms the importance of outreach and marketing. In 2016, 268,867 Tennesseans enrolled in health coverage during the open enrollment period. Shortly before Open Enrollment 2017 closed, funding for outreach and marketing was cut by $5 million. Enrollment declined by 13% in 2017, and only 234,125 people enrolled in private plans through the Tennessee exchange during open enrollment.

Recent polls show that 78% of Americans, including over half of those who supported President Trump, want the government to do what it can to make the current health care law. Senator Alexander has announced that he will hold hearings of the Senate Health, Education, Labor and Pensions Committee, which he chairs, when the Senate reconvenes next week.

Renewal for Medicare Savings Programs

In recent months, TJC has received a flood of calls from older Tennesseans who have discovered that their Medicare Savings Program (MSP) benefits have been terminated by TennCare. MSPs are programs administered by TennCare that assist low-income people pay for the out-of-pocket costs of Medicare, including premiums, deductibles, coinsurance, and co-pays. TennCare is in the process of redetermining the eligibility of everyone enrolled in MSPs and terminating benefits for individuals whom it determines are no longer eligible. State and federal law guarantee that beneficiaries be given advance notice, an opportunity to document their eligibility, and assistance with the paperwork before their MSP benefits are terminated. Unfortunately, for many people that is not happening.

Many individuals who have had their MSP benefits terminated report that they never received a renewal packet or a termination notice from TennCare. They only discover that their MSP benefits have been terminated when they receive a notice from Social Security informing them that TennCare will no longer pay for their Medicare premiums and that these premiums now will be deducted from their monthly Social Security check. Social Security then withholds not only the Medicare premium for the current month, but also the payments for several prior months since it apparently takes Social Security some time to process the eligibility information it receives from TennCare. This often leaves them with a Social Security check of less than half of what it was when they were receiving MSP benefits. A cut of this magnitude in Social Security benefits for these older Tennesseans means that many are unable to afford basic needs like food and shelter.

These problems have been widely reported. See D. Dare, “Morristown Medicare recipient removed from savings program after confusing mailer,” WATE Knoxville, July 12, 2017; M. Timms, “Seniors left scrambling after TennCare makes cuts to Social Security checks,” The Tennessean, July 21, 2017;  M. Timms, “Springfield family caught in TennCare enrollment gap,” The Tennessean, August 8, 2017. Nevertheless, TennCare has thus far declined to pause its eligibility redetermination process while it investigates the problem. Indeed, TennCare is not even keeping data about the number of MSP beneficiaries who have been terminated from the programs.

At the request of Speaker Beth Harwell, the Tennessee Comptroller of the Treasury has opened an investigation of the problems with TennCare’s eligibility redetermination process. TJC is advocating for TennCare to stop terminating anyone’s MSP benefits pending the results of the Comptroller’s investigation. This is the only way to ensure that older Tennesseans do not suffer wrongful terminations of benefits, with potentially catastrophic consequences for those affected.


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President ending cost sharing reductions would raise premiums, create chaos

Since the efforts to repeal the Affordable Care Act collapsed in the Senate last month, President Trump has been threatening to “let Obamacare implode.” There are several things the Trump administration could do to ensure that implosion happens. One of those things is ending payments for cost sharing reductions (CSRs) that help insurance companies offset the costs of offering low-deductible, low-cost-sharing plans for low-income people. In a series of Tweets, Trump referred to these payments as “bailouts” and threatened to end them. If he does so, it would wreak havoc on insurance markets, driving premiums up and driving more insurers out of the Marketplaces. According to a new report from the nonpartisan Congressional Budget Office, ending payment for CSRs would cause health insurance premiums to increase by 20% next year and would continue to increase in later years.

What are cost sharing reductions (CSRs)? The Affordable Care Act (ACA) provides two kinds of subsidies to help low- and middle-income people pay for health insurance: premium tax credits and cost sharing reductions (CSRs). Premium tax credits help cover the costs of insurance premiums for people with household incomes up to four times the federal poverty level. But even with subsidized premiums, most low-income people can’t afford to use their insurance, because they still cannot pay the high cost-sharing (deductibles, co-payments, co-insurance) required by most insurance plans. To help those who would struggle to pay for cost-sharing, the ACA requires insurance companies to reduce the cost-sharing levels for people making less than 250 percent of the federal poverty level. About 6 million Americans, including over 155,000 Tennesseans, receive cost-sharing reductions. The ACA then instructs the federal government to reimburse insurance companies for the higher cost of offering these low-cost-sharing plans, and the government so far has been making payments to insurers for doing so.

What is the Trump administration threatening to do to the CSRs? The Trump administration is threatening to stop making the payments to reimburse insurance companies for offering the low-cost-sharing plans. If the Trump administration follows through on its threat, insurers will still have to provide low-cost-sharing plans to eligible people. The insurers just won’t get reimbursed for it.

What would happen if the Trump administration stops making the CSR payments? This would throw the individual insurance Marketplaces into chaos and trigger huge premium hikes. Some insurers will choose to leave the Marketplaces altogether, leaving more counties with few or no insurance plans available and more people without access to affordable insurance. Other insurers could compensate for the loss of CSR funding by raising premiums. According to the Congressional Budget Office (CBO), insurers would raise premiums in the individual market by 20% next year to cover the loss of CSR payments, and premiums would continue to rise in later years. Indeed, some insurers are already raising premiums for next year in anticipation of an end to CSR payments.

Ending the CSR payments would also cost the federal government more than continuing to make the payments. This is because CSRs are only available to people who enroll in a silver-level Marketplace plan, so insurers would focus their premium increases on these plans. Silver-level plans are also the “benchmark” for determining premium tax credits, so increasing the premiums on silver-level plans would dramatically increase premium tax credits for everyone receiving them. The CBO estimates that ending CSR payments would increase the federal deficit by $194 billion in the next decade.

Can the Trump administration legally stop making CSR payments? That is debatable. The ACA requires the federal government to make CSR payments to the insurance companies, but it does not specifically appropriate any money for doing so. Critics of the ACA claim this is a problem because the Constitution says that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by law.” Supporters of the law argue that ACA implicitly authorizes the expenditures. This Constitutional dispute is already the subject of one federal lawsuit. In 2014, the House of Representatives filed a suit (formerly House v. Burwell, now House v. Price) challenging the authority of the Obama administration to make the payments. The district court ruled against the Obama administration, saying that the CSR payments were illegal and ordering the CSR payments stopped. The order did not go into effect, though, because the Obama administration appealed the ruling.

Then Trump was elected. Until recently, Trump simply could have dropped the appeal and allowed the district court’s order to stop making CSR payments go into effect. But the D.C. Court of Appeals has now allowed 17 states and the District of Columbia to intervene in the case, since their citizens would be hurt by the loss of CSR payments. The Court said that ending the CSR payments “would lead directly and imminently to an increase in insurance prices, which in turn will increase the number of uninsured individuals for whom the States will have to provide health care.” This does not end the lawsuit or decide the legality of the CSR payments, but it makes it more difficult for the Trump administration to dismiss the appeal and claim legal cover for ending the payments.

Can Congress do anything to ensure the government keeps making the CSR payments? Yes, Congress could appropriate the money, even if only temporarily. Luckily, several senators, including Sen. Lamar Alexander, Chair of the Senate Health Committee, have expressed interest in a new bipartisan effort to stabilize the health insurance Marketplaces. Senator Alexander has asked the Trump administration to continue funding the CSR payments through September to give Congress time to appropriate the money going forward.

Senate Votes No on ACA Repeal

This mural features the signatories of TJC’s sign-on letters, which were delivered on Tuesday, July 25th to our Senators’ Nashville offices as the Senate in Washington D.C. voted on the motion to proceed.


In the dark of the wee hours of the morning, GOP Senate Leadership and our two Senators tried to pull a “fast one” on America. They unveiled a plan called the Health Care Freedom Act, also known as “skinny repeal”, late last night and, less than 3 hours later, held a vote for passage.

Around 1:30am ET, this bill failed, with Senator McCain casting the crucial vote to kill the “skinny repeal” bill. He joined the Senate Democrats and GOP Senators Collins and Murkowski to reject the last-ditch effort to repeal the Affordable Care Act.

If the Senate had voted for the Health Care Freedom Act, it would have had future crushing consequences for real Tennesseans. It would have resulted in 16 million people losing coverage and most privately insured people having a 20% increase in premiums. It would have destabilized the insurance market. Four senators held a press conference yesterday announcing they would vote for the “disaster” skinny repeal bill only if they got assurances that it would never, ever become law. As they admitted yesterday, the “skinny repeal” bill was really a pathway to destroy Medicaid once it passed and moved to a conference committee with the House.

Never in the history of this great nation has either party played such games with procedural processes and rules that were written to ensure every Senator had a full and fair opportunity to deliberate on what would become the law of the land. Apart from the procedural shenanigans, the merits of the bill were historically harmful. That’s why all stakeholder groups told Congress it was bad policy- faith leaders, doctors, families, & consumer groups, even insurance companies.

Last night was a miracle. TJC feels so privileged to stand alongside you, the miracle workers. Thank you for continuing to stand up for Tennesseans.

What we are savoring is the extraordinary Tennesseans like you who rose to the challenge and made history themselves. You wrote, you called, you prayed, you told your stories, you made signs, you read policy blogs, you became health policy experts from your children’s hospital bedside, and you told your terrified neighbors that they weren’t alone. The GOP Senators thought no one would be watching last night. Yet, the calls just kept coming to their offices. Again and again, Congress has underestimated the power of love and the strength of resilience born of protecting a suffering loved one for years with countless sleepless nights. If they wanted to pull a fast one on these moms and caregivers, they will have to get more clever than a 2 am vote. Middle of the night stress is families’ home turf!

We know this fight isn’t over. But with each battle, we get stronger.

As the old song goes: “Anything they can do – we can do better!” We urge Tennessee elected officials to listen to the people who pay for their insurance and send them to Washington to work on fixing problems, not creating new ones. The season for political games is over. Our message to our elected officials: get to work solving problems that matter to us!

Don’t be fooled by “skinny” repeal

This week, the Senate has tried and failed to pass two different bills that would repeal the Affordable Care Act (ACA). On Tuesday night, the Senate’s ACA repeal-and-replace bill, the Better Care Reconciliation Act, went down, 43-57, with nine Republican Senators voting no, including Tennessee Senator Bob Corker. Then on Wednesday, the Senate voted down a bill that would have repealed the ACA without a replacement. Seven Republican Senators, including Tennessee Senator Lamar Alexander (but not Senator Corker), voted against it. Both of these bills would have caused millions of Americans and hundreds of thousands of Tennesseans to lose coverage and would have caused millions of others to pay much more for skimpier coverage.

Now, in their last-ditch effort to pass something, anything, that would allow them to repeal the ACA, Senate leaders are promoting a new idea: a “skinny repeal” that would eliminate the ACA’s individual and employer mandate and the medical device tax. The Senate is expected to vote on this bill, which has not even been written as of Thursday morning, by Friday.

If it becomes law, “skinny repeal” would hurt millions of people. The Congressional Budget Office estimates that it would cause 16 million Americans to lose coverage next year and would drive up premiums by 20 percent for millions of Americans. It would also further disrupt insurance markets, potentially causing what health policy experts call a “death spiral” and the markets’ ultimate collapse.

But the goal of Senators pushing “skinny repeal” is not to pass the bill into law, but to revive GOP efforts to repeal large parts of the ACA and make devastating cuts to Medicaid. As Senator Corker has made clear, passing skinny repeal in the Senate is just a “forcing mechanism” to get to a House-Senate conference committee. In other words, skinny repeal is a Trojan Horse.

Once that Trojan Horse gets in conference, a small group of hardline conservatives will meet in secret to draft yet another ACA repeal-and-replace bill. To ensure that it gets enough votes to pass both houses, the final bill will almost certainly include all the damaging provisions that have been in every other repeal-and-replace bill produced by the House and Senate:

  • slashing federal funding for Medicaid by imposing per capita caps;
  • reducing subsidies that help low-income individuals afford premiums and cost sharing in the individual insurance market; and
  • weakening consumers protections like the ban on annual and lifetime limits and discrimination against people with pre-existing medical conditions.

Once the final bill is unveiled, Senate Republicans would then be faced with an up-or-down vote on the final bill in September. Either they vote for a bill harsh enough to satisfy the ultraconservative House Freedom Caucus or the GOP’s seven-year effort to repeal the ACA ends in failure. Senate leaders appear to be betting that moderate Senate Republicans will bite the bullet and vote yes.

If Senators Corker and Alexander are really concerned about the well-being of their constituents—the hundreds of thousands of children who depend on Medicaid to get a healthy start in life, seniors in nursing homes trying to live the remainder of their life with dignity, people with pre-existing conditions who need access to care, people in rural communities with struggling hospitals that could fail if federal funding is cut—they should not support this procedural gimmick that opens the door for enacting a law that will harm those constituents. Instead, they should heed Senator McCain’s call for a return to “regular order” and engage with colleagues in an open and bipartisan fashion to come up with effective solutions that will stabilize the Marketplace, keep coverage affordable, and protect the healthcare of all Americans.