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Changing the Employee Benefit Conversation

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The National Association of Health Underwriters (NAHU) represents several hundred thousand insurance agents and agencies throughout the US.  NAHU is the preeminent organization for health insurance and employee benefits professionals.

Earlier today they released the following statement regarding the failure of the Graham-Cassidy proposal.

NAHU has met with bipartisan leadership in the House and Senate, as well as other industry stakeholders, to promote bipartisan measures for market stability. Unfortunately, we do not believe the current Graham-Cassidy proposal serves to stabilize the individual health insurance market and we have significant concerns that the lack of adequate guardrails for states applying for waivers could create instability in the employer-sponsored health plan market. 

The proposal would dramatically restructure the ACA from the federal government to the states. While some level of returning decisions to the states is desirable, the scope of restructuring allowable under this proposed legislation is likely to have untended consequences, including a larger number of uninsured individuals, without actually taking the steps needed to stabilize the individual health insurance market. 

The proposal would redirect ACA funds back to the states as block grants, allowing states broad authority to determine how to apply these funds. Theoretically, states could take actions that would eliminate important consumer protections rather than just those that impose unnecessary costs in the system, but could also go entirely in the opposite direction and go far beyond ACA requirements, such as adopting single-payer or a public option for one or more markets in the state.  

We also have serious concerns with the retention of the Cadillac/excise tax and the Health Insurance Tax (HIT), which, once they are retained in this proposal and redirected to the states in block grants, will effectively make them permanent as states will grow dependent on these funds for implementing their health reforms. The Cadillac tax will impose a 40% excise tax on health plans that exceed certain cost thresholds beginning in 2020, while the HIT is currently under a one-year moratorium and is set to take effect again next year, adding an additional $500 to average premiums per affected family every year. 

States would also have greater authority under the proposal to implement changes through the ACA’s state waivers. While NAHU seeks greater flexibility for states to innovate on health reform, we do not believe that the flexibility proposed under Graham-Cassidy is appropriate. The expansion of state waivers without any of the guardrails in effect under the ACA’s current 1332 waiver program could undermine employer-based coverage governed by ERISA, which is one of the indispensable pillars of the employment-based system. We have strong concerns about the potential effect on multi-state employer plans. While some loosening of 1332 waiver restrictions is desirable, some minimum standards are needed to ensure that outcomes are positive rather than detrimental to markets that are not currently at risk.

Finally, the proposal would lead to a chaotic patchwork of 51 different versions of health reform, one for each state plus the District of Columbia. While some state flexibility beyond what is currently allowable is needed, establishing 51 completely different versions of healthcare systems would not only eliminate provisions that protect consumers but would also cause an enormous compliance burden for employers attempting to navigate the various health systems and their corresponding regulations and requirements.

Ensuring private health insurance market stability and competition, as well as improving health coverage affordability, are among NAHU’s top goals. As such, we are unable to support the Graham-Cassidy-Heller-Johnson proposal as it lacks what we believe are the key tenets of market stabilization. We look forward to working with Congress and the administration on bipartisan efforts to improve our healthcare-coverage system and ensure access to high-quality affordable healthcare.

Posted 4:57 PM

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