[inaudible conversations] >> good afternoon everyone everybody would just quiet down we are one minute early thank you for joining here today with the evolving health insurance market the acting president and ceo for lines of health policy if you are not familiar we are a nonpartisan organization dedicated to knowledge and understanding the health policy issues we are live tweeting during this

event feel free to submit questions via twitter. you also have cards in your packets you can ask questions somebody will pick them up and then we will submit those to the moderator i also want to welcome those are watching live on c-span we are happy to have the coverage and also a small note you have blue evaluation forms that helps us with programming and your suggestions how we can improve. so going right to the meeting today over the last two years there has been a number of changes in the individual health insurance market days

include repealing the individual mandate and suspending cost-sharing reduction expanding access to plan that do not comply with the original standard, most recently freezing payment to the risk adjustment program. they have contributed to the uncertainty of uncertainty and affordability and the individual insurance market. with the state regulators this briefing will unpack the current landscape of the insurance market and responses to stabilize the market we have an incredible panel here today but before we get started let's think the commonwealth fund. and then to moderate today's

p&l. we are spending a lot of time on bios today but you have time for that and then to introduce our speakers think use thereof. >> on behalf to think the alliance and the panelist for joining us today about the responses to the evolving individual insurance market. some of you may be familiar with the state scorecard on performance where we use federal data to compare state performance with a large number of indicators the scorecard has shown over time long considerable variations across the state as key indicators to also find in recent years that the aca has

narrowed those access measures with the percentage of uninsured and those to get care. this is because the affordable care act set those standards that the health plan has to cover to ban insurers from denying coverage so the affordable care act to get four subsidies in the individual market and those activities like establishing the marketplace and the funding navigator programs. but it also find considerable state variation and those areas of access those that are insured ranges from three and

a half percent but it is very possible with those actions that they listed regarding the individual market as well as those state sponsors wyden those differences to get health insurance and healthcare the focus of our discussion is how states are responding and what likely implications that shows the interactive tool on the website how states are addressing these federal actions and as you can see to pick up the stabilization strategies and increasing oversight out plans that don't

comply and to create financial incentives to maintain coverage and to add subsidies to the tax credits. also out today is a new report and also on the commonwealth fund website and with that insurance coverage with the individual mandate we have a distinguished panel leading off the panel is sabrina who is a research professor at georgetown university of

numerous reports of those actions we will be discussing today and the assistant director for policy legislation national association of insurance commissioners to represent those insurance regulators in all 50 states and the insurance commissioner and was reelected to the fifth term in 2016. associate commissioner with the insurance administration and jeanette is the senior vice president for strategy and in the health insurance marketplac marketplace.

>> thank you for inviting me today it is a pleasure to be with all of you. and to talk about the individual market. and now coming from several years of this area. , calm and restful summer. we go from one fire drill to another. but driving premium rates in the individual market and around the country so in general the individual market that could be hard to imagine a typical year what was insurance companies be

thinking about for their customers or a picture of what are the factors? it is obvious what kind of help services they are using core to renew their policy or marketwide trends and what they charge for their prices and as well as marketwide trends and use of healthcare services looking at the effects of the federal regulatory pieces with the benefit mandate or shifts of policy and looking like the cost sharing reduction to compensate insurers for the cost of low cost sharing plan

to those enrollees. looking at things like the stabilization program part of the affordable care act from the risk adjustment program to make adjustments do i have to pay into that program because i am attracting healthcare or will i receive money under that program? that is what the insurance companies and then to make changes to the benefit design to that particular service and to span her contract and then

to feed into those premiums and then of course to administer the plan which is taxes and fees and with those profits and contributions you could see a range like 2% profit that just depends on the company. >> b looking at 2019? and in that individual market and they think insurance is a neat field with those proposed premiums but they actually don't go into effect but in those proposed rates and that

is effective january 1, 2019 the president's decision with those cost sharing reduction and those for low income folks. and then to raise rates because they are predicting the promotion of short-term and the association health plans direct them away to the individual market to this camp here insurance policies. but moderating those rate increases that the aca has delayed for one more year and those that are in the jobs act

and applied to them and to shift the costs little bit and that is lowering premiums. >> and it has been an interesting story following the individual market one year ago at this time there were areas of the country facing the prospect of no insurer at all meeting consumers high and dry ohio oklahoma iowa tennessee i think it was the unheralded that remarkable policymakers to political

persuasion by al gore by kirk to make sure every county in the country was covered but the not so good news one quarter of enrollees have one company to choose from there just isn't a lot of choice going into 2019 with a notable expansion that only a small part so it is a brighter picture going into 2019 with the aca storm there are some wildcards and most notably with the administration to free the risk adjustment

transfers the critical program to the market stability and i am hopeful that is resolved quickly but it heightens the anxiety that this administration's competence to operate the marketplace i am running out of time i know we'll talk more but we will see some divergence in terms of the premium involvement because of state policy decisions matter and those that have taken up or leaning in to stabilize the markets of the individual mandates with those plan limits that they are not as attractive for the

aca coverage. and to give themselves more flexibility but also to embrace the opportunity to deal regulate in iowa such as iowa and idaho and potentially north dakota and with that i will pass it on all about insurance regulations. >> thank you very much. who knows who your insurance commissioner is? get to know your insurance commissioner because it remains a state -based product each is very different so talk to your department of insurance to find out and then

to talk about how regulation is done with federal and state and those decisions they have under the aca as we move forward and what we are looking at. under the mccarran ferguson act states are the clear regulators of all insurance. not federal. in 1974 a law passed that brought the federal government into group insurance. with those benefits including health was brought into that. but if that grows -- goes and buys insurance it is regulated by the states but if they self insure it is regulated by the federal government. so to get into that insurance area but with hipaa they stepped in further with

portability to the individuals but and then to stuffing it into the area with that preemption standard to prevent the application of and then to prevent the application of the federal law that is preempted. that takes precedent. so this is where the federal government in many different areas in the individual market to have federal standards for access or rates but states can still regulate and of the federal law that is where we

are at right now. states had to make some key decision when it came to how they would regulate. life insurance solvency. nobody can sell that product a mess they to sell that product. that's the way it is. it feels like they are involvement they can shut them down but so when it comes to make sure they have all of those benefits and disclosures? that now becomes the state and federal coordination i am for state and federal laws that prevent that application and with that chump administration

and then texas oklahoma and wyoming with the federal government does it. and then with two regulators in the case. so with that certification what can be sold on the exchange of federal government takes the field say can say i will partner with you. i will run the tools within the state can play that role. but that he deadline and then to go more and more toward the state that is those notices going to companies in the middle of lake michigan which nobody does. so states are more and more

involved with the federal exchange to have a problem with subsidies than the federal government takes care of them but the insurance company so we have good coordination there. so who will enforce? enforce the federal government to do that but then say i will not enforce california or missouri and then these two states here for many of the state and then to do that as well with the federal platform

those are the options the states can make to be a partner or to take a larger role like quality but most are saying that i will do those kinds of things than the aca from the beginning to recognize the states need to play a major role one size at all to be as flexible as the states they are doing reinsurance we have three states and four more have requested reinsurance waivers but they need to start looking more broadly now. what else can i do? the need to figure out how far they went to take the sand central benefits is a new one they can change them every year and specific sections.

so they have more flexibility now alabama and illinois are expected to change theirs now for 2020. risk adjustment how many of you know you can do that? but the latest things maybe people will be thinking about it but even the federal risk adjustment they can request modifications to the formula. transition plan they cannot be sold but they can be a new. and some states have not allowed that at least through

2019 this is a big deal regulate these? states. there was an amendment that said all arrangement regulated 100% by the states that means they buy insurance so all states now have to decide what will we do? who regulates them? the state. then they decide what they want to do like medicaid expansion, and now it doesn't matter what color they are so how can i make this work better the second stuff that i start over there but what

about the other? what about them it is too expensive a family of four cannot afford that. that is those waivers how can i get coverage? that is what we are looking to the now let's turn to the state to make that point certification they may not know those arrangements. >> all association health plan it doesn't matter because they all involve multiple employers but not all are association health plan so the final pool

to make it clear everything we talk about every new plan are arrangement. >> 84 invitation to join you here today. >> what you can see is 270,000 people through the individual market relatively small number 4% of the states population a small segment then to pay those premiums and in the individual market but that on

the evening news you watch it on television for very personal cases to be disadvantaged so over what we had previously what we believe is driven by cost as opposed to a stronger employment picture and something that we worry about going forward and from inside of the exchange to offer the individual products seven of them and 74 plan overall with a 2019 projections. every county in the state of washington will have choices last year we had a couple of counties and those i left

without any ensures we don't have that problem this time around but those that you have only one insurer with those rural counties that are much more isolated and challenged. and in 2019 approximately 19% requests have come in from the insurers with a 36% rate increase last year that these decisions are under review with mid-september. . . . .

our own state-based insurance exchange didn't allow policies to continue. not rocket science those tend to be the healthier people who don't need health insurance is much and at the time they get sick they want to go over to the compliant plan so we didn't allow them to essentially water down the risk pool. we also did something that was a pace setter for the country very adopted a clear network adequate to standards in those standards are once to make sure that all carriers have the same requirements and doctors and

hospitals and the availability of providers and their network. we are down to 6% right now from the standpoint of the uninsured rate in the state of washington. the rate increases that we looked out for the first three years when they have the federal reinsurance program was under 10% per year. that has obviously changed now as you can see and you have choices in every county. the next graph here, before the administration's actions premium increases were stabilizing. that is not true today. before the aca the plans were once that invariably did not cover pharmaceuticals in their coverage of pharmaceuticals didn't cover routine maternity which meant that the plans were

weak and inadequate. we want to ensure everyone meets the same standard so they are available to everybody really needs it that matt means we need to continue to see what we can do to stabilize the increases. we face deliberate acts to undermine probably saw as a stabilizing market in the state of washington. we observe that our insurers start to get nervous and nervous insurers are not a good thing because they tend to wantage charge more rates to cover their anxiety. 50% of the people enrolled in washington state through the individual market receive subsidies. 40% inside the exchange do not receive subsidies so 60% of the people inside of exchange are receiving subsidies. they are counting on us to protect them going forward.

i will be the first to say that the aca is far from perfect. i have had the opportunity to be involved with insurance regulation before the aca and obviously afterwards and there is a consequence taking deliberate action right now to help to try to stabilize the market which is not being properly addressed if we are ending the individual mandate funding csr's suspending risk of judgment and that's having advertising and now navigator funds silly pay for it independently. not defending the pre-existing condition requirements in the texas case right now by the administration and obviously it makes us very nervous because all of a sudden you could wind

up with carriers potentially if that were to be carried out ensuring people do not have protection of a pre-existing condition. we are doing what we can right now protect the market so it's not further segregated. such things as short-term medical we strictly remit that -- limit that and adopting rules for it in the same applies for association health plans both of which only fragment the market that much more. additional steps that washington is taking legislatively, we will make sure we don't have a -- have a requirement certain programs that they participate in the program to offer exchange plans.

it's a way of trying to keep the market stable. we tried to have a state-based reinsurance program coming up with a funding mechanism for some $200 million proved to be quite a challenge and it's one that we may revisit but it's very difficult for us again trying to hold down rates particularly for those who do not receive subsidies. we also had legislation introduced to establish an individual mandate to make up or the federal one that went away and it's very difficult when you are from a state that does not have a state income tax. it's problematic to find an alternative that would be available. rural areas are real challenge for all of us as they tend to be much more expensive and harder to put together networks so as we work now to adopt short-term limited duration and have clear

disclosure as to what they covered what they don't it makes it very clear to people. we obviously work closely with our insurers at every step and it's voluntary on their part whether they stay in the market. they have the ability to lead if that's in fact what they want to do. we encourage them to stay in these counties in all working together doesn't actually benefit people in the state of washington and obviously individuals who might wind up in the situation with bad health insurance. my greatest fears we slip back to the days we had before the affordable care act where we didn't cover pharmaceutical and maternity. they were inadequate plans. if you wind up with an individual who is healthy you probably would have liked it because they were. cheap but if you end up with someone who has bad luck and develops metastatic cancer or any other types of major medical

problems that kind of bad luck means the insurers were in the position to work against you and sends saying we'll want you. we need to make sure that is not the case going forward. thank you. >> just one point of clarification in your comments. when you refer to cancel plans those are similar to the plans their bride referred to as transitional plans. >> these were policies that have been canceled in the state of washington when president obama that point made the announcement that you could continue with the other existing plans that you had a few liked it. they had already been canceled and had been in several states as well. it's difficult to come back and try to re-create them so that's why the terminology, i sometimes get it mixed up. >> the states that allow them to

continue and many states haven't. >> right. >> thank you. thank you all very much to the commonwealth fund and into the allowance for allowing us to come and speak and represent the state of maryland here today. please talk briefly about some of the recent actions that maryland has taken but i want to give a little bit of quick history of the state of the market in maryland. there's a little bit of a contest between maryland and washington. with the start of the aca we had been down to two. only one of those carriers is the entire state and the other coverage is what we call the i-95 corridor. the uninsured rate at the beginning was 13% and we are down to 6% now. looking this year at the average rate request an individual

market from the carrier it's about 30% average and some of that is a little bit skewed. we have some issues in the individual market and they are significant issues. so trying to do some things to help out the individual market. the federal government returning more control to the health care markets in the states which is greater access to health care for individuals. that has been the policy for the last couple of years in response to the general assembly in 2017 formed the health care protection commission. it was during the 2017 commission to did a lot of fact-finding and in 2018 there were some legislative action mostly in the form of senate bill 387. i touched on the three issues that i mentioned right here. starting out with, starting with

the individual mandate the first bullet points are kind of factual and the next to discuss something sabrina touched on which is whether or not the penalty was large enough in maryland. we discussed whether the penalty for the mandate was large enough and others didn't think it was large enough. in the grand scheme of things we would have a penalty for sure period of time so i'm not sure there's any way to make any conclusive determinations on whether or not it was effective. was also demonstrated by her carrier. rate increase requests were filed as a result of the individual mandate. it's not clear there was legislation introduced this past session which would have imposed

a state raised mandate. in maryland it didn't get much traction so all that action is at the federal level for this year but senate bill 387 did pass. he touched on short-term medical plans and said short-term medical plans have to be less than three months in duration. they have too have an end period and it has to be less than three months. that tracks with the old obama era rule. the law also says a couple of very important things including the policy may not the extended or renewed. medical underwriting is still allowed. the carrier must apply the same underwriting standards for everybody so what does that mean? that means that you can't use mechanisms to try to take your short-term policy and extended

out past the three months. i can tell you that we have had -- from carriers who ask how they might feel us to do things like that. using one application on a given day to issue a short-term policy that goes three months and having that same application to issue a second policy. even if circumstances and health conditions have changed. that's not the same medical underwriting. my questions to them are, are you resetting deductables and the answer is well, yeah i think so most of the time but we would like the variability to not have to reset. the same thing with out-of-pocket limits and that kind of thing. they want the flexibility to actually have us carry over and turned into policy for the short term can be extended. that's not really what the intent of senate l. 387 with

regard to short-term medical plans is. the association health plan rule took, basically took the small group market of requirements and apply them to association health plans so in maryland the group health insurance is one that is organized and maintained in good faith for purposes of insurance. there's also the five-year requirement. that was one of the two things that were addressed in the final rule but most importantly senate bill 387 says if you are issuing any coverage through an association to eligible employees of the small employer title xii applies and that is all of our small group market rules which include requirements to offer the benchmark plan and

the small group rates apply. other significant thing about association health plans is carriers are subject to capital and surplus requirements so essentially if you want to write the association health plans in maryland you have to operate it in an insurance company so we anticipate that we'll meet some of the interest of some people may have in the association. 1332, reinsurance waiver, maryland has applied for the ability to allow reinsurance to be considered as one of the factors when they rate plans in the individual market. what this does is allow, let me go back. our estimated funding level is

$462 million which is a lot of money to be putting into the individual market over the next couple of years. it provides premium relief especially for the individual's purse dasd purchasing the exchange of mommy get their premium relief it saves money for the federal government. that money can be added to the money that we put in as the state and come up with afforded $62 million. so we are doing that to try to get relief. one of the things that was raised in our public meetings with regard to the reinsurance application with cms was if you have risk adjustment that deals with unhealthy people compensate carriers at an insured level for handling the unhealthy people. you have reinsurance handling their claims. hhs had looked at that

previously when they had federal transitional rate insurance but they didn't ever try to go to great lengths to quantify that as it's difficult and their transitional reinsurance was temporary. so the federal government is very interested in that action. we received comments. we are starting to study that in trying to quantify but the extent of that interaction isn't trying to figure out how we can use reinsurance regulations which we have to write by the end of the year. exchange is writing them and m.i.a. is consulting with them. we are trying to figure out how we can actually take those regulations into the reinsurance calculation working with the adjustment and then apply really some sort of meeting factor for the reinsurance payments to make sure or at least to minimize any sort of overlap or double payment. >> now no would like to know why

a reinsurance program is under the federal government and maybe want to explain that. >> i probably didn't do a very good job but you gave a great explanation. >> if you run a reinsurance program you are bringing down premiums. it's outside money coming in to help with plants. when the premiums go down your tax credits go down and there are provisions that say if you are saving the federal government money you basically get that money coming back to the state to rate tax groups so as rates go down you are saving tax credit money and that savings goes back to the state which they can use for really any purpose but most are using it for reinsurance. >> you guys are doing great and the last one bringing up the rear. you guys are the last thing i do before i go on vacation for a

couple of weeks so i'm feeling really good that it wanted to a little bit of level setting in build on the points of some of our others on the panel. i know you probably have a list of questions you want to ask. here is what you all believe in terms of thinking about what really impacts and why do you say what you say in where does that money go? talk a little bit about that. what are the recent policy developments and what do they mean for consumers who depend on the coverage and talk about the challenges. i agree with what brian said about affordability for that population that doesn't get a tax credit. talk about some of our thinking there and of course risk adjustment and i promise i won't get too technical. i think you first have to think about when you or your employer are paying every month or health insurance company where does your money go? i think that's a good level

setting point as we are thinking about the headlines you may read about premiums going up and that sort of thing. we put together working in june this interesting info graphic which shows for every dollar you are paying and where does that money go? i encourage you to look at it on line to break down what all these different categories mean. as you look at it, 22.3 cents of your dollars go to prescription drugs. that's definitely growing over time. 22 cents to pay doctors, 16 cents to hospitals and so on so i think it's a good thing for you all to think about what talking about premiums. where does the money actually go? we are having to pay people to deliver health care that everyone needs in it so important. what do those doctors required terms of reimbursement etc. and several things you ought to think about that image and

prescription drugs and obviously that's a significant portion of your premium dollar but who is covered? are they old, are they young, our basic? all that drives the plans. what kind of providers in the network? is it narrow? and finally how the charismatic. a lot of talk is so important not just throwing more and more money in the inking about controlling the quality of care that's delivered in making sure that money is very well spent in terms of premiums. so as sabrina mentioned all of that thinking kicked off way before you all had been thinking about it in the clear in this pig period right now we are plans are really done. they have developed their plans, their benefits in their rates and for those who work on the field do have a lot of questions about potential legislation

solutions that come up in june, july and august and we are just about finished. we need to think about the timing that goes into some of these proposals. we are happy of course to talk about them and provide a discussion but its eyes important to know how long of the time goes into the planning of benefits and how that process plays out and sabrina is going to talk about that as well. i believe in the packet we have included specific states that i think are good for the states that you are tracking. it's hard to read in a number of speakers already spoke to this part of looking at how much care is going to cost there is obviously component of what's happening in the united states and what's happening to washington d.c.. we have an issue brief that we link in the packet that goes into more detail about these factors if you can't see it up there on the screen. these are things like the mandate an obviously that has had an impact on planned rate

filings. 2019 will be the first year and we will see how that drives or doesn't drive coverage. cbo has one in there others out there about how that will impact how many people for coverage. stay pacific programs like what bob talked about in terms of maryland's insurance. there's a moratorium for 2019 and that's about 3% of the premium that you pay. i would say there is really a lot of uncertainty around some of the regulatory developments related to association plans that have been spoken of at length in the short term grants. we see the rule or in some cases a proposed rule. we don't know how the market is going to respond to that and what that's really going to mean for people who remain in the market and how healthy they are. so very interesting and i would hate to be a health plan actuary right now for a lot of reasons but specifically because a lot of this is unprecedented.

we don't really know how this is going to drive markets and specific states. so i think we have seen from the administration with the executive order from a sober a real policy shift to focus on regulatory action and these regulatory actions are focused on one primary goal which is giving people alternatives to the aca coverage. that is a very clear goal in terms of the association health plans in the short-term plans. i think it's important to know that all these types of plans are very different. they have different rules, different structures and benefits etc.. we did lay out a little bit more detail the types of plans we use and you know what our biggest issue is making sure when consumers are purchasing these products they understand that they are buying. how many of you would like to read your insurance contract every year, really. it's really important in

disclosures. i think we mentioned this a little bit in terms of the 2019 outlook that i would say at least going into a couple of the 4th of july week the plants knew what they do. we understood the environment and the trends that were happening at various companies and across the country and from a different state programs and i always say whenever there's a press release saying something is stabilizing then something happens. we have a number of new entrants coming into the states. a new local metropolitan area which i think is really exciting showing that health plans are committed to serving this market they want to be able to support people who don't get coverage through work or don't qualify for federal program and they want to support this market. we have to be in that positive development there. the one thing that i would highlight and we 100% agree with what brian said is this is not working for those people that

are caring for a family member, they are a sole proprietor, they don't have insurance through work. i think where we really at the end of lot of support are those policy solutions to support that aspect of the market. that is the part of the market at least in the current market plus the uninsured of 28 million or so that are really going to be driven toward some of these aca alternatives. that's going to drive up costs for the people that remain depending on how healthy they are and assuming a healthier person would leave that market. that's a significant concern for the individual market. this risk a judgment -- risk assessment. i'm happy to take questions. a lot of complicated legal developments in the case yesterday or the day before. the administration sent an to roam final rules to omb to respond to the issue in a court

case related to the methodology behind how much people pay in and receive from our risk assessment program. a hip along with the cross them loose shield association submitted a motion in the case. a mexico judge also addressing this uncertainty. we can get into that a little bit more if you all have questions about that. really appreciate your time. thanks for hanging with me this afternoon and we welcome your questions. >> thank you jim at an thank you to the other panelists. i'm going to open this up to questions now. there are two microphones on the floor and also forms that you can fill out an ring up. before we get started i do want to ask one question to the panel as. it's a two-part question and it's the issue that brian raised

and highlighted and jeannette also underscored the affordability of insurance plans for people above the subsidy threshold so foreign to present above poverty which is only 90 to $100,000 a year for a family of four. as jeannette mentioned they are going to be the most likely to be attracted to these non-aca compliant health plans but there is also a lot of plans that don't comply with the affordable care act and policies that are solved by health sharing ministries, farm bureau policies. my question is and jeannette has a really nice list of things that consumers should think about with their plans. how are people going to know that they have a plan that may not cover everything that they need that might underwrite certain members of their family?

do these plans have warning labels on them and is that going to vary a lot in each state? >> states are going to have requirements for disclosure. that's the strongest protection number one and if they fail to have to submit that material to the state for approval or at least to review it so they know they are giving proper information to consumers before they make the purchase. it's clearly one where the buyer is going to be forewarned before making the acquisition of the short-term medical products that have some real distinct limitations to it particularly if it turns out that they have a very limited coverage for pre-existing conditions. those people really need to know that before they make a poor -- purchase and try to use it and find out the hard way that they don't. i can tell you the state of

washington in my discussion with my colleagues from other states they are going to address it. >> certainly the disclosures are required for short-term medical and some of the other plants as well. it's important as commissioner kreidler mentioned that people look at previous but also listen to what your producers telling you. make sure your producer is telling you something that matches with the paperwork that they put in front of you. they need to make sure they understand exactly what they are getting. >> i want to push back a little bit. in our analysis relating to short-term plans very few require them to submit rates on an annual basis.

so there is actually not a lot of review of what hits the street and time and time again we hear about consumers that get very this -- marketing plans that look a lot like a major medical policy but it's not pretty if you want an example of the kind of sophistication you might have to have as a consumer , i got a call the other day from somebody who bought a short-term policy that was basically four, three-month policies. it said it covered mammography. she goes to get a mammogram. then she gets a really big bill and she said it covers mammography and i'm not supposed to get a bill. oh it covers the reading of the mammography. it said it covered mammography. it doesn't cover the reading so

you have to pay this gigantic bill. i'm not sure disclosure and 10-point font at the bottom of the a 10 page marketing brochure is going to do the trick. >> i certainly would add is a caveat when they are not going to allow them to renew that policy. one-time deal and is limited to three months. >> really the point is there is a lot of variation across states and there are all of these kinds of plans so -- i also think it's important on the affordability side states have a lot of pools that have been using these plans to give people cheaper policies who are above the specials. want to point out that congress has the ability to extend the subsidies so we have an analysis that rand did on our web site that shows if you list the afford it% of poverty threshold and allow the congress to extend

people above that level it has a natural phaseout. no one pays more than 9% of their income towards their premiums so it's actually not very costly for the federal government to do this but it would really provide a lot of relief for people over that threshold. in the absence of that states are really scrambling now to address the affordability issue in their markets. one of them actually is the promotion of these alternative than the fed policies but their reinsurance efforts at the state at this point is a way of making plans more affordable and maybe the panel would like to chime in on how other states are doing this. or what states are doing to make the policies affordable for people over that threshold. >> the key tools that we are

looking at right now are reinsurance but there are some other ideas out there. i'm don't know if you are familiar but they are trying to create a state plan with the different risk pool. another option out there a lot of the same benefits and things like that but because it's a different pool it provides more affordable options. you have iowa following tennessee creating a state farm bureau plan which they call not insurance which means it doesn't have to comply with the aca but a way to provide more affordable coverage that it can be good coverage to people in those states. we will see how that plays out. this is going to be the challenge. what states are looking at is what we can do going forward. we have spent the last eight years tragic figure out what the options are and we keep hearing changes at the federal level, regulatory changes and all kinds of things so can we get to the

point where things are stable enough for or reconsider down and figure out for each state the best affordable options for people and that's a challenge for everybody right now. >> stabilizing the market is number one. we don't want to see individuals going off to health insurance products that are inadequate but cheap and as soon as they get sick they come running to the aca compliance. if you do that you have a very expensive risk pool and that person with the cheap policy will pay through the nose tomorrow when i try to get full coverage because all of a sudden i have -- . >> i was also note that the expense comes to taxpayers as well. they are paying for a lot of that covered some exchange and the rates keep going up because it becomes a higher risk pool. taxpayers are paying that time. >> there are some creative policy solutions that people are

thinking about. minnesota did something interesting a couple of years ago where they created a specific state discount program for those people that were unsubsidized. unfortunately that didn't work that well. it was late in open enrollment so there were other complicated factors related to that. that was something that states could certainly consider. the budget questions are a big one. the individual market doesn't get the same tax that when you get employer or small group coverage and thinking about that only individuals up to four to present qualify for that premium tax credit. there needs to be a debate around that and their are sort of other things that we think are really important is this when rural areas addressing and expanding access to telemedicine and other things to really help get at the cost of care lever to

think about how you get that underlying cost down that are important to consider. it's not -- reinsurance is great and we loved reinsurance but they are looking at that in concert with other things that address more of the underlying root causes of some of the things i've shown on my slide as to why the cost is a smaller pool of people that continues to go up. >> also want to mention in addition to minnesota subsidy program a couple of states and you can see it on georgetown's new map on our web site other states have also increased their subsidies so they have taken a different path on reinsurance and increased subsidies for people. so i'm going to switch to the first question. >> mike miller and background i'm a physician who's been doing health policy for about 30 years that i want to get the context for the senate and the house

over the last 18 years i've been buying my own health insurance from four different states riot lived. i am the face of your constituent in that unsubsidized individual market. i want to bring up a couple of things that ryan brought up is one thing that is very clear sabrina mentioned divergence and there's a great deal of diversions for the aca. in the last few years it's been increasing. in the state i live the rates are going up very much. ran into a friend who's a republican and he's paying $36,000 a year for a family of four and i'm paying about nine. i'm probably going to be leaving the state of maryland before the end of the year because i'm potentially facing a 95% increase in premiums next year. my question is the state insurance commissioners do you guys think within your state operations how this affects

economic development and prosperity and job growth particularly in this economy. i was living in a state eight years ago at what they did in their small group market was drawing people in who are starting businesses and they knew they didn't have to worry about how to get insurance for the new employees or for themselves while they were going on this entrepreneurial risk taking venture investing a lot of time and money and their lives and money into this new venture. the question is are states thinking about their individual insurance markets as part of their economic development policy and practice? thank you. >> it think it's safe to assume we all think about it. we are very limited as to what we can do about it. we are caught in a dilemma as to what we can do that is by far the most effective certainly for most states and for the state of washington to expand medicaid

program and allow those policies to enter the risk pool and a number of other steps we could take a state where most effectively we could help to stabilize the market and hold those rates down. i think that has always been one of my primary motives to make sure we get closer to 100% coverage for health insurance. when people don't have coverage they impact the rest of us and the system adversely by causing -- we have got enough problems with pharmaceuticals and just the general medical trends without having to do some of the stuff we could do. >> the answer to your question is yes but i would also say there is somewhat limited ability to respond to focus on the reinsurance program because it does offer the ability to get some premium relief almost

immediately in 2019. it's very hard to look past that right now because that is the thing that can get us the most relief right now. certainly we are always concerned with the folks who are in that spot. we have public rate hearings every year and people are in the same position as you are are there every year telling us about this. so we are trying do what it is we can understanding that our mandate is to provide or true proof rates that are not inadequate, not excessive and not unfairly discriminatory. we are doing what we can. >> do you have a question? >> i am an intern.

i've been looking at a lot of the rate request and a few of the states such as minnesota and pennsylvania have requested decreases and given the insurance programs. why do you think the federal reinsurance and ended and why would you like more bipartisan support for reinsurance at the federal level even though most states are talking about it and we spent the entire time today talking about it? >> baca only allowed up for three years that but it was transitional reinsurance and the idea was we would reach stability in three years. we tried. but there has been bipartisan support for the federal reinsurance program. last year there was a bipartisan group that got a bill through the senate. it would be $10 billion a year which translated to $18 billion

after going out to the states. that would have been a tremendous help nationwide especially for states that may not have the funds available to do an assessment that things like that. unfortunately got tripped up right at the end and the bipartisanship fell apart. right now we are not doing it. we are still very supportive of that and that would be a quick and easy way to get that stability so we could move on to the more in-depth changes necessary. >> i would just add there are a lot of states unfortunately that the reinsurance at the state level is very challenging either because it's difficult to get the legislature to raise the revenue or there is just not that infrastructure. a lot of states that have done it have leveraged the pre-aca risk pool infrastructure. can be a really heavy lift at the state level so perhaps we

will soon be in more rational political times here in congress and the federal reinsurance can be revisited. >> is really interesting but wisconsin ended up doing. it had governor scott walker supporting stapes reinsurance programs and how he funded that was because of the savings from the health insurance tax moratorium and how that is taxed their medicaid managed care plans that he used those savings so a very creative approach by that moratorium had been passed after they had gone through the assessment process. it's a creative way to find a rainy day funds if you will and jumpstart the program in the state. >> thank you. >> i have a few questions that have come in.

do you have a question? i think you might need a microphone. >> and sarah hanson with bloomberg law. anyone can respond to this but healthy people who are in exchanges are not like me to leave because they are getting subsidies. i would like to get a response about that because you are saying all the healthy people will go to the cheaper markets for short-term plans but if there is an aca now think it's a subsidies so why would they leave and can you respond to that? >> yeah sure. i had a great slide showing that roughly 10 million exchanges and eight million buying off exchange. think of somewhere between 80 and 90% of people on exchange

are subsidized. i think the concern you're hearing about these alternatives are non-aca compliant policies is that it will be largely the unsubsidized healthy folks that will gravitate to the cheaper options but also remember the aca subsidies are on a sliding scale based on your income. if you are fairly low income between 100% of the poverty line you are getting a pretty good deal but if you get closer to 40% at the federal policy line you have to contribute as much as 10% of your income to premium alone which can be a pretty big bite out of family income. for folks like that i think many could find the short-term plans are a cheaper option. >> the state of washington where

a little bit of an exception from the average among the health insurance exchanges around the country. 40% of the individuals who use the exchange did not receive a subsidy in our state exchange. that is much higher than almost any other state and maybe every other state. it's a little bit different in that respect so their concern is if we don't do something that helps a premium -- which werfel referred to a subsidy for those individuals who do not receive assistance for their premiums that more and more of them are going to wind up leaving the market. >> we have a question here. >> i'm rhonda and i'm also an intern.

the ian had mentioned a big topic of discussion right now which is prescription drug prices presenting its premiums. i was just wondering if there were any state or federal policies that have been proposed that you think will reduce overall premium? >> earlier this week brief filed significant comments on the administration prescription drug blueprint which i think has a lot of great ideas getting at this issue. one challenge is our request for information in so those really have to be turned into actionable policies to drive some of those results. one of the interesting ones that wasn't there was looking at director consumer advertising and talking about what something really costs.

i think there a lot of good ideas out there. the underlying unit cost of prescription drugs and these continual price increases that is the root cause and sometimes it gets wrapped around the axle and thinking about other issues and that sort of thing but i think it's really about how the get more competition and how do you reduce costs? it the only way we are going to get at this and 22.3 cents on the dollar that you are paying every month goes towards prescription drugs. i don't see that number going down frankly. >> there's actually an interesting finger-pointing episode going on and it's been going on for a while. he will see that pvm's point the finger at the manufactures and say they are the reason drug prices are so high and manufactures point their fingers at the dvm since they are creating artificial spreads when they go ahead and dispense or

have their reimbursements with the pharmacists. there is a lot of finger-pointing as to why prescription drug costs are so high and i think people need to take a look at that and at a policy level to get to the bottom of that if you are going to get traction on any solution. >> kate with the american physical therapy association. my question would he think the impact will be on the states that have expanded medicaid and maybe transition from it population into the private market and now are going back and i'm thinking arkansas and new hampshire in particular. they are kind of backtracking and will that affect the overall risk pool for good or for bad or what your thoughts are on that. >> i'm not an actuary and so

take this for what it's worth but i think there is some evidence that the population is between 10130% of the federal poverty line where they are currently in medicaid and they are talking about shifting to the marketplace but i think there's evidence generally a sicker population and could have a negative impact on the marketplace risk pool. i think it each of those days will take their own actuarial analyses and figure that out and figure out whether the trade-offs are worth it. >> my name is lance kilpatrick and i'm a consultant. a lot of the themes that i'm hearing on the panel today which are not so surprising is the lack of control over so many different forces that are

causing a lot of faith pressures going on. i'm wondering if this is an inflection point where this could cause rethinking about creating a public option or faith-based medicare for all. rose is going to be talking about this issue this fall and i was wondering what the panelists thoughts on that word. thank you. >> as the only elected person on this panel let me say as i observe what's taking place right now in the system i clearly see some degradation taking place to the point that the only way you can cover is to move to a single-payer system. consolidation that you have seen among providers much less among

insurers all of which the kind of competition that we are participating is that much more difficult to accomplish. i think the system itself and to some degree the resistance in aca which is a market-driven approach moves us that much closer to a single-payer approach overall. >> it's interesting. if you look at the actual cost of coverage in the individual market premiums it's not that much different from the group market premiums. people in the group market are insulated from that cost thanks to the tax exclusion and all of

that but the point being we don't talk on these panels about the underlying issue which are the prices that providers charge of the cost of care and so one intriguing thing about the public option is good that get not so much the universal coverage with people rightfully care about the something to push back on the provider. which is where a lot of our cost issues lie. you look at for example medicare advantage one of the reasons that it's able to function so well and medicare rates from providers is because medicare exists as a public option and so basically the players in that market just piggyback on the medicare rates. >> i can't sit here and not jump in on this question.

definitely from our perspective we really want to think about how we can support private market solutions in the role that health insurance providers play. 178 million americans get coverage through their employer and that market certainly medical costs affect affordability but it's working for a lot of people. we have these broadbrush discussions of around single-payer medicare for all. he you really have to think about the disruption to the programs that are working when it seems to me the real problem is looking at the smaller population and individual market that gets all of the hot air for people like you and others that are buying coverage on your own and looking at solutions to fix that. let's talk about improving now. we have good ideas and others do as well on both sides of the aisle. let's do that and before throwing out the baby with the bathwater going back to these

other approaches. >> i want to point out there had definition of -- definitional issues. we seeing congress proposals for continuum of public action and even at the state level might even want to talk about what they are doing in washington to ensure that everyone has a carrier in providing public plans at their schools and whatnot and private plans to serve public institutions. there are bills in congress that would insert a medicare like public plan option for example and the proposals run along the continuum where more and more people have access to such a

public plan. you would have to distinguish between these more marginal solutions to fair markets and it goes off into the single-payer round. there are potential ways to address some of the market issues that we are seeing particularly by coming up with a public plan option or requirement for insurers to stay in the market if for example they stay in the medicaid program. i think there is a lot of fluidity in terms of what we mean by public option. go to the next question please. >> i'm. i am an intern like the others. i have a question about reinsurance and the mechanisms that reinsurance employees to

the rate of increase in premiums if the state applies for 1332 waiver and they have a state raised reinsurance program the money they get from the federal government is equal to the amount they are saving the federal government in terms of tax payments. >> at least on the reinsurance side you are taking the worse claims out of the system and pulling them out. you are obviously dropping the biggest drivers of claims costs out save and drop your premiums. if you've got lower premiums the second lowest costs over planned cost drops.

therefore you have got a lower subsidy coming but you can do an actuary of study and shows that the use of that reinsurance what would have happened had you not pull those claims out of the experience and then you can show what would have happened versus what you anticipate happening and there's a gulf there. they pass the savings back to did that answer your question? >> kind of. specifically what i'm trying to get at is the amount of money europe putting into the health care system, so the amount of money that they are -- that the state is getting from the federal amount is the same in the reduction to the tax credit right? >> there has to be some upfront money that goes in and lowers the premiums and the net

savings. that's where we get caught up. something has to reduce the premiums as so there is that money coming from the outside. it automates it because you get savings back which further lowers. now i'm better understanding your question and the answer is it's not necessarily okay you save $200 million and the state gets $200 million. cms looks at it and they used some calculation and i don't know what it is to determine what the actual savings are but it may not be a dollar for dollar exchange. >> thank you. >> we have time for one more question. >> i'm trader and dan lampert with the alliance for retired americans and i just wanted to ask there's a lot of discussion on the aca that aren't working as intended at least but one piece of right now that does

seem to be working more or less as intended is the 80/20 medical loss ratio. particularly for the commissioners on the stage i was wondering if any of you are anticipating changes like less vigorous enforcement and if so how you are preparing for it. >> it's somewhat interesting in the state of washington when it came to the medical loss ratio's 80/20 stipulation that 80% being for medical services and 20% for administrator costs, we had almost no payback to insurers because we were already meeting the standards. ..

>> and that's day remedies. >> i have not heard anything knows only areas that has been discussed is possibly a break for world areas to let them spend a little more money on that outreach and those kinds of things with a break on that. that is the only thing we have heard with the story of the marketplace.

>> but most carriers are well above 80% some are 100% so is there just to make sure it doesn't get out of control. >> thank you. we are out of time unfortunatel unfortunately. >> we can all agree with a round of applause so we have a lot of people that started off as an intern. but then you become consultants of course. i want to thank the commonwealth fund it was an incredible discussion to evaluate the blue evaluation

form we would love to get your ideas for further topics for other briefings so thank you again for coming you can watch again in a couple of days on the stand if you did not get enough. [inaudible conversations] >> you are writing there is political considerations why do they want to take up these bill bills? >> republicans are trying to push back on the democratic attacks with the rising obamacare premiums in the past it was attacking those premium hikes but now it is the advantage so next wee