Bipartisan Healthcare Stabilization: Funding Subsidies, Improving State Waivers & Revising the Employer Mandate (H.R. 4695)

What is H.R. 4695?

(Updated June 7, 2018)

This bill — known as the Bipartisan Market Stabilization and Innovation Act of 2017 — to stabilize the individual health insurance marketplace and enact reforms aimed at bringing down healthcare costs. It would fund Cost Sharing Reduction (CSR) payments which help low- and middle-income families afford healthcare expenses, create a $115 billion fund for states to stabilize the health insurance marketplace, streamline state innovation waivers, repeal the medical device tax, and modify the employer mandate so it impacts fewer small businesses.

Congress would be given clear authority to appropriate funds for CSR payments, and the Dept. of Health and Human Services (HHS) would be required to report to Congress on:

• How much is being paid each year;

• The effects of such payments on the costs of health insurance in the individual market;

• Projected costs of health insurance in the individual market over the subsequent year.

A Patient and State Stability Fund would provide $115 billion over 10 years beginning in 2019 ($11.5 billion annually) to backstop high-cost health claims for patients. States could use the funds to help patients enroll in coverage, reduce the cost of premiums, reduce out-of-pocket costs, and promote enrollment in the individual and small group markets. States would be required to submit applications detailing their plans to receive funds. If a state doesn’t submit an application, or an application isn’t approved the program will default to a federal backstop, working in conjunction with the state, which will reimburse insurers for patients with especially high medical claims.

Section 1332 State Innovation Waivers would be made more efficient by:

• Allowing states to access the full amount of federal savings that would be realized via an approved waiver. (States currently only get the savings from reduced spending on premium tax credits and CSRs.)

• Shortening the approval window for a 1332 waiver from 180 days to 90 days for standard applications.

• Setting a 45-day time limit for 1332 waiver applications filed in response to an urgent situation in areas at risk of excessive premium hikes or having no insurance plans offered, or requests that are materially identical to an already approved waiver.

The employer mandate imposed by the Affordable Care Act (aka Obamacare), which requires businesses with more than 50 employees to offer their full-time workers health insurance or pay a penalty, would be revised so that it’d only apply to businesses with more than 500 full-time employees. Full-time employees would be defined as working at least 40 hours per week, rather than 30 hours per week as under current law.

Other provisions of this bill would:

• Repeal the 2.3 percent medical device imposed by Obamacare effective January 1, 2018.

• Require HHS to issue regulations within one year to allow Section 1333 Health Choice Compacts between states. (This was required by Obamacare, but HHS never issued the regulations.)

• Express that Congress should offset any projected increases to the deficit caused by this bill with policies to negate the projected increase.

Argument in favor

This bipartisan bill represents a good faith compromise that will stabilize the individual health insurance market while also easing regulations to reduce healthcare costs, thus helping Americans.

Argument opposed

This bill keeps too much of Obamacare in place by continuing to provide subsidies to health insurance companies, while also undercutting the ACA by repealing the medical device tax.

Impact

People buying health insurance on individual market or would be hit by the medical device; employees who work less than 40 but more than 30 hours per week; employers with between 50 and 500 employees; insurers; states; and HHS.

Cost of H.R. 4695

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Sponsoring Rep. Kurt Schrader (D-OR) introduced this bill with the bipartisan Problem Solvers Caucus to stabilize the individual health insurance marketplace and bring down healthcare costs:

“Families have been rocked by uncertainty when it comes to health care all year long. At the surface, it can seem as though this year was full of political and partisan nonsense. But I’m proud to be part of a group of individuals from across the political spectrum who have been working together to tackle this extraordinarily vital issue. Legislating on health care — an area that’s incredibly personal and complex — takes time and effort. As with any major piece of legislation, everyone agrees that there are needed fixes to the ACA. At this point, it’s clear that partisan politicking doesn’t lead to solutions for anyone. I’ve been working all year with my colleagues across the aisle, hearing from health care providers, insurers, patients and professionals to develop this bill. The compromise we brokered will bring down costs and provide much needed stability. Now we must work to enact it as soon as possible.”

Original cosponsor Rep. Tom Reed (R-NY) added:

“It is a great day when a bipartisan group of lawmakers can come together on an issue as important as health care. I am proud to stand with my Republican and Democrat colleagues to help improve health care coverage for my constituents in New York and for Americans across the country. These legislative fixes will provide immediate relief and help stabilize the individual market and prove that bipartisan problem solving is the best way to move this country forward in 2018.”

This legislation has the support of 25 bipartisan cosponsors in the House, including 15 Democrats and 10 Republicans.

Of Note: Provisions of this legislation have been introduced as standalone, bipartisan bills to repeal the medical device tax and define “full-time employee” as working 40 hours per week during this session of Congress.

Media:

• Sponsoring Rep. Kurt Schrader (D-OR) Press Release
• Rep. Schrader Section-by-Section
• Ripon Advance