In an Inside Health Policy article published yesterday, Thorn Run Partners’ Senior Vice President Shea McCarthy weighed in the potential auto-enrollment of individuals into health plans, an idea spearheaded by Senators Bill Cassidy (R-LA) and Susan Collins (R-ME) in their healthcare bill entitled The Patient Freedom Act. “Aside from helping Republicans improve the dismal coverage numbers estimated for House bill, auto-enrolling people in low-cost plans could also help keep the individual market balanced,” noted McCarthy. “Assuming some logistical concerns could be assuaged, insurance carriers would have plenty of incentive to participate in a market where the federal government were directly enrolling healthy people who might not otherwise purchase coverage — potentially reducing premiums for other enrollees. The policy could ultimately be a more powerful tool than the individual mandate to bring younger and healthier individuals into the market.” McCarthy also acknowledged that while the rollout of an auto-enrollment policy would likely be challenging, there are avenues that can be explored to make the process feasible. “States could supplement federal data by requiring residents to say whether they are insured when they pay state taxes or renew their driver’s license. The states also could allow hospitals and physicians to identify uninsured patients to be enrolled into no-premium plans.”
The article in its entirety is posted below.
Cassidy Says Senate Working Group Eying His Auto-Enrollment Idea
May 17, 2017
Louisiana Republican Sen. Bill Cassidy said the health care working group handpicked by Majority Leader Mitch McConnell (R-KY) is looking at auto-enrolling individuals as well as other ideas tucked into the Patient Freedom Act he introduced with Sen. Susan Collins (R-ME). Cassidy, who is not a member of the working group, said he will meet with actuaries this week to discuss what types of plans individuals could be auto-enrolled in.
Senate Majority Whip John Cornyn (R-TX) said the idea came up at last week’s working group meeting and was well received. Sen. John Thune (R-ND) said Wednesday (May 17) that he has been trying to at least get a discussion going on what auto-enrollment might look like. He added that the largest question surrounding the policy is how the mechanism would work. The more that can be done to get everyone in the pool, especially if it is optional, would make it better for everybody, he said.
“I wouldn't say at the moment that we're close on that issue,” he cautioned.
Cassidy said auto-enrollment is a way to get healthy people into the risk pool and spread out expenses. The policy is supported by Democrats as well, including Former CMS Administrator Andy Slavitt, Cassidy added.
Slavitt could not be reached by press time to discuss his position. But he recently told the Washington Examiner via Twitter that auto-enrollment is “in the category of workable ideas.”
The Cassidy-Collins bill would create new Default Health Insurance Coverage plans into which states could auto-enroll otherwise uncovered individuals, who could choose to opt out. The default insurance would be a high-deductible plan that could be paid for with a Roth Health Savings Account, and would cover Tier I prescription drug coverage for a limited number of drugs for chronic conditions, offer an adequate provider network determined using Medicare Advantage guidelines and cover childhood immunizations without cost-sharing, according to a Health Affairs blog by Timothy Jost summarizing the bill.
Jim Capretta, a scholar at the American Enterprise Institute, is a big advocate of auto-enrollment for both employer and public health insurance programs. “Republicans should seek to reduce the number of ‘eligible but not enrolled” Americans by aggressively pursuing auto-enrollment mechanisms,” Capretta wrote in The National Review Jan. 12.
Capretta described the approach as follows: “Employers would be encouraged to place workers into coverage and then allow these works to opt out if they want. Similarly, using tax and other data, states should place tax-credit-eligible households into default insurance plans if those households fail to make a selection of insurance on their own using federal tax credits. These default plans would require no insurance premium from the enrollees because the deductibles for these plans would be adjusted so that the premiums for coverage would exactly equal the credits. These default plans should also be made available to anyone who would like to get catastrophic insurance protection with no additional premium above the tax-credit amount.”
A lobbyist close to the issue says lawmakers could implement an auto-enrollment policy by requiring insurers to offer products with premiums that match the value of the federal tax credits. For example, if the basic, age-adjusted federal tax for a 40-year-old is $3,000 then every insurer in the state would have to make a policy available for people with a $3,000 premium. The lobbyist says the no-premium coverage would have higher deductibles, but it would protect individuals against high medical claims.
“Aside from helping Republicans improve the dismal coverage numbers estimated for House bill, auto-enrolling people in low-cost plans could also help keep the individual market balanced. Assuming some logistical concerns could be assuaged, insurance carriers would have plenty of incentive to participate in a market where the federal government were directly enrolling healthy people who might not otherwise purchase coverage — potentially reducing premiums for other enrollees. The policy could ultimately be a more powerful tool than the individual mandate to bring younger and healthier individuals into the market,” Shea McCarthy, vice president of Thorn Run Partners, says.
But a lobbyist acknowledged it would be hard to imagine conservatives in the Senate–like Sen. Ted Cruz (R-TX) and Mike Lee (R-UT) — supporting a policy that could be viewed as a mandate.
It would also be a challenge to determine who to automatically enroll. “States could supplement federal data by requiring residents to say whether they are insured when they pay state taxes or renew their driver’s license. The states also could allow hospitals and physicians to identify uninsured patients to be enrolled into no-premium plans. If Congress were to decide they wanted to auto-enroll Americans in health insurance, it stands to reason they could also build a platform to make that type of policy possible — but the roll-out would likely be complicated,” McCarthy said.
The Cassidy-Collins bill would give each state three choices: re-adopt the ACA at the state level, create a state health insurance alternative still ensures those with preexisting conditions are protected but with less federal money than provided by the ACA, or create a new state-designed alternative with no federal assistance. — Erin Raftery (firstname.lastname@example.org)