California Officials, Insurers: Health Care “An Ongoing Battle”

Buoyed by Congress’ failed attempt last week to replace the Affordable Care Act, California officials, health advocates and insurance executives are pressing forward on a new phase of resistance against GOP efforts to weaken the health care law.

California Insurance Commissioner Dave Jones sent a letter Wednesday to the White House and Health and Human Services Secretary Tom Price, urging the administration to enforce the law.

He and other supporters of the act are lobbying the administration and California’s 14 congressional Republicans to preserve two components they consider critical. Those are the individual mandate — the requirement to buy health insurance or face a tax penalty — and subsidies that help poorer Americans afford health care costs.

Despite House Republicans’ stalled effort to advance replacement legislation, the administration still wields great power to shape the law because it can either enforce its provisions or allow federal agencies to roll them back. And Congress can refuse to appropriate money for subsidies that draw insurers and consumers to the marketplaces.

In January, Trump signed an executive order giving federal agencies the authority to waive or defer provisions of the health care law that they deemed burdensome.

“We’re sort of catching our breath and starting to regroup in this new phase,” said Anthony Wright, executive director of Health Access, a California consumer-advocacy group that supports the law. “We are trying to identify what the threats are and what can be done. We’re just restarting the process and focusing on these looming issues.”

The two biggest questions that state officials and industry executives are pressing federal lawmakers and the administration to address are the individual mandate and a stream of federal funds called “cost-sharing subsidies” that help 7 million of the poorest Americans, including 800,000 in California, pay for out-of-pocket health costs.

The Internal Revenue Service recently had begun to relax its enforcement of the individual mandate, which experts say could weaken the individual market by allowing healthy people to forgo insurance, leaving a disproportionate number of sick people to buy in and driving up costs.

“I write to request that you and your Administration stop taking administrative actions which undermine the Affordable Care Act and destabilize health insurance markets across the country,” Jones wrote in a draft reviewed by The Chronicle. “Instead of continuing to undermine the (act), I urge you to work to stabilize the nation’s health insurance markets by fully enforcing and implementing the Affordable Care Act.”

The Trump administration is sending mixed signals about its intentions with the health care law, which often is referred to as Obamacare. In two recent tweets, Trump said that “Obamacare will explode” and that “Democrats will make a deal with me on healthcare as soon as Obamacare folds — not long.” On Wednesday, in testimony before the House Appropriations health subcommittee, Price indicated his agency will enforce the law — including the individual mandate — but suggested there is no proof the mandate works.

Price avoided answering questions about whether the department will cut advertising to promote the federal health care exchange. In late January, it pulled $5 million in advertising meant to remind consumers to sign up for insurance during the final days of open enrollment, a critical time for signups. Price also dodged a question about whether the administration will continue the cost-sharing subsidies, which insurers say are critical to their continued participation in the exchanges.

Further complicating an already-fluid situation, House GOP leaders and Trump this week said they are reviving negotiations on a bill to replace the Affordable Care Act, though specific proposals have yet to emerge from those talks.

Dr. Mario Molina, chief executive of the California health insurer Molina Healthcare, is one of the few industry executives who publicly lobbied against the GOP repeal bill. He said the thwarted legislative effort does not change his plans to continue pressuring lawmakers to fund the cost-sharing subsidies.

“It’s still an ongoing battle, we’re continuing to advocate on behalf of the (Affordable Care Act) and reforms that will help stabilize the marketplace,” said Molina, whose company sells insurance on exchanges in 12 states, including California. “We’re meeting with governors and members of Congress. That will continue.”

Molina said that if the cost-sharing subsidies were eliminated, his company would have to raise premiums between 10 and 12 percent.

“Those need to be continued, and Congress is silent on that,” Molina said. “Without them, it really does jeopardize the individual market.”

The cost-sharing subsidies were created under the act to help low-income Americans with co-pays and other out-of-pocket costs. They are separate from the subsidies the federal government provides to help consumers pay for insurance premiums. California consumers benefit from $750 million of the $7 billion cost-sharing subsidies that are distributed nationally through insurers. Those payments are a big incentive for insurers to stay on the exchange.

The subsidies have been challenged by Republicans for years. In 2014, the House sued the Obama administration, arguing that Health and Human Services did not have the authority to implement the subsidies because Congress did not appropriate the funds. A federal judge ruled in favor of the House, but the Obama administration appealed the decision.

After Trump took office in January, his administration asked the appeals court to hold off on the case while the legislative effort to repeal the law was under way. Now, Price simply could stop defending the case, which could halt the subsidies as early as May. Conversely, Congress could decide to appropriate the funds to pay for the subsidies, which would allow them to continue.

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