Senate health committee Chairman Lamar Alexander on Wednesday said that the 18 million Americans in the individual insurance market are facing an “Obamacare emergency” and “without quick action, many of these 18 million Americans may have zero choices for insurance next year.”
Tennessee state insurance commissioner Julie Mix McPeak – who testified on Wednesday at a Senate health committee hearing Senator Alexander chaired – said in August of last year that the Tennessee Obamacare exchange was “very near collapse.”
Senator Alexander said at the hearing, “In my home state of Tennessee, in September of 2016, we woke up one morning and BlueCross BlueShield announced that it was pulling out of Nashville, Memphis, and Knoxville. That’s 131,000 people who had BlueCross insurance in the individual market. And they wouldn’t be able to buy it in 2017. So they don’t have that option this year.”
He said, “That’s an alarm bell in every one of those homes. It’s a lot of trouble when you lose your insurance option. And in two-thirds of our counties in Tennessee, people who buy their insurance through the exchanges only have one option now. And that’s true in a third of the counties across the country.
“We may reach a situation in 2018 where many Americans have a subsidy through the Affordable Care Act to buy insurance in the individual market, but they don’t have any insurance to buy. It’d be like having a bus ticket in a town where no buses run. Right now in two thirds of our counties we’ve got only one bus running through town and in 2018 we might have zero. That’s the problem to solve.”
Senator Alexander said, “Now, it doesn’t make as much a difference to me as to whose fault that is. I can make a pretty good speech about that and you can make a pretty good speech saying why it’s not your fault or it is our fault. I think the question the American people want to know, particularly if they’re among the 11 million people in the exchanges or the 18 million in the whole individual market, is well: What are you going to do about that?”
Senator Alexander’s full remarks are below:
For six years, Republicans and Democrats have been fighting like the Hatfields and McCoys over the Affordable Care Act, which we call Obamacare. We’re very good at this—we can make our speeches in our sleep, and have cast many votes on either side of the aisle.
I received a letter from Senator Kaine and I think a dozen other Democratic members of the Senate saying we’d like to work with you, as you Republicans begin to take a look at the Affordable Care Act and make changes in it.
I responded to him to say I’d like to do that. Now, I’m not a naïve person, and I know that it’s not easy to move from Hatfields and McCoys to working together on this issue, but if there is one area where we ought to be able to do that, it’s with the individual market and the problems that we have with it. Because it’s a relatively small part of our health care system.
Medicare is 18% [of the 290 million Americans who have insurance], and the discussions that we’re having, at least I’m having with most of the people I talk to about changing our healthcare system, or repealing or replacing Obamacare, we’re not talking about Medicare.
Medicaid [is 22%]. Most of the conversation we’re having about Medicaid is about more flexibility for states. That can be discussed separately.
The employer market [is 61%]—most of that is not in crisis, although the small group market, which is a relatively small part of that, could stand a lot of work.
But where the trouble is, and what this hearing is about, is the individual market. The people who buy insurance themselves in the individual market. They are too young for Medicare and they’re not covered by Medicaid, they don’t have insurance through their employer, which is where most people get their insurance. So they’re in the individual market.
That’s about six percent of everybody in the country who has insurance. Four percent of everybody insured -- or two-thirds of the six percent—four percent of everybody insured, are in the Obamacare exchanges. So that’s the focus for today as far as I’m concerned, I’m focusing on the individual market, especially exchanges, because I understand that what happens in the exchanges affects the rest of the individual market so that gets us up to about 18 million people. It’s a small percentage of everybody who has insurance, but these are all real people and they’re in trouble if, at least in our state of Tennessee, if we don’t take some steps. So I would just say to my colleagues that I’m certainty willing to try to do as we’ve often done here on big issues, about which we’ve had historic agreements, and that’s to look for areas of willingness to work together.
I think, speaking for myself, I think we’re going to have to take some action pretty quickly. It’s going to have to be consensus action, which means it’s going to have to get more than 60 votes. It’s going to have to be the kind of thing I hope what was mentioned in the letter that Senator Kaine and others wrote to me, and it can be done just affecting the individual market without arguing about the whole rest of the American health care system.
It can be done temporarily. It can be done in effect to stabilize that market for two or three years while we discuss everything else. And I think that it means that Republicans are going to have to approve some things we normally might not support, and Democrats will have to do some things they normally might not do during this transition. But that might be a good step towards a kind of legislating we’re accustomed to doing in this committee.
The only other things I would say are these:
In my home state of Tennessee, in September of 2016, and we’ll hear more about this from Julie McPeak, the state insurance commissioner. We woke up one morning and BlueCross BlueShield announced that it was pulling out of Nashville, Memphis, and Knoxville. That’s 131,000 people who had BlueCross insurance in the individual market. And they wouldn’t be able to buy it in 2017. So they don’t have that option this year.
Well that’s an alarm bell in every one of those homes. I mean, it’s a lot of trouble when you lose your insurance option. And In two-thirds of our counties in Tennessee, people who buy their insurance through the exchanges only have one option now.
And that’s true in a third of the counties across the country. And what we’re told is that unless we take action fairly quickly, and that’s what I want to hear from our witnesses today, that we may reach a situation in 2018 where many Americans have a subsidy through the Affordable Care Act, to buy insurance in the individual market, but they don’t have any insurance to buy. It’d be like having a bus ticket in a town where no buses run. Right now in two thirds of our counties we’ve got only one bus running through town and in 2018 we might have zero. That’s the problem to solve.
Now, it doesn’t make as much a difference to me as to whose fault that is. I can make a pretty good speech about that and you can make a pretty good speech saying why it’s not your fault or it is our fault. I think the question the American people want to know, particularly if they’re among the 11 million people in the exchanges or the 18 million in the whole individual market, is well: What are you going to do about that?
Some of the things can be done by the Secretary of Health and Human Services. And I would like to include in the record a list of health insurance reform regulatory changes from the National Association of Insurance Commissioners, which has specific recommendations on how to stabilize markets, including providing more state flexibility and improving the regulatory environment.
But some of it will have to be done by us. We’ll have to agree on it.
So that’s the subject I hope we can discuss today. While there is lots to say about Medicaid, there is a lot to say about the employer market. There are fine speeches to be made defending Obamacare and attacking Obamacare, and senators have a right to make those speeches, and witnesses have a right to say what they want to say. But for me, the most helpful thing that could happen today is for you to answer these questions.
One, is there really trouble in the individual market in our country, and in what states, and how many states?
Number two, specifically, what should we do about it?
And three, by when do we have to do it?
One insurance commissioner told me that if we didn’t act by April of this year, there wouldn’t be insurance sold in his state next year, which is 2018. In other words, people would be sitting there in that state with their bus ticket and no bus to get on. So that’s what I hope the hearing is about.
I thank Sen. Kaine and others for their letter. It is in the spirit of the way that Sen. Murray and I have worked on a lot of issues over the last couple of years. I realize this is a contentious issue and I realize this is a contentious time, but you know, things change, and when people need help, we’re supposed to provide it. So I thank the witness for coming and so many senators for being here.