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In a rising premium environment and in light of all this uncertainty what impact does the individual mandate have on peoples purchasing decisions. Again, ties with Family Foundation says most are unaware that the individual and most are aware that the individual mandate is still in effect but for intent of uninsured are unaware or unsure about the individual mandate. So, then the next question is what is going on with other executive orders and this issue of choice. I think the question here is when you give people choices about Coverage Options, it can potentially have an adverse impact on the risk pool depending on what those options are. This issue of choice has a history and it didnt start with this Current Administration but has a history with the transitional plan exceptions, president obama same and if you like your plan, you can keep it. That was the beginning of maintaining Coverage Options outside of these marketplaces that insurers would say would adversely affect the insurance pool. The Current Administration has come out with some other ideas in the new executive orders and one is to expand shortterm limited duration plans which have historically been viewed as accepted benefit plans and not covered by the requirement. They were narrowly defined by the prior administration. Why . Because by granting this kind of choice with more folks believe the concern it was take over and weed out more of the better risk selections to these kind of products. The other thing was an Association Health plan that the executive order just recently put out and this will again take time. It, too, will have arguably the same effect of draining off the Better Health risk. Why . Because if you are in Association Health plan and rather than taking the current view which is i will not look at the association in the aggregate and i will look at each Employer Group member that is a member of that association you get very different results in terms of premium rates and in the case of an Association Plan where it is not aggregated the premium rate limitations of the portable tracks would apply. This also, by the way, is an awful lot of confusion about these Association Health plans and are we talking about insured Association Plans, real insurance policy issues and yes, they would be requirements of state Insurance Law and the Affordable Care act would apply. Or are we talking about self insurers Association Healthcare plans that would have the reach to go across state lines without worrying about state Insurance Laws and as a result, be free of a lot of the requirements of the Affordable Care act in the process. I know i am running short time and i think i have expired my time. Me the last point here be as we look down the road and the bipartisan approach to deal with some of these issues. One, to take out the issue of legal ambiguity on the csr which will talk about to create definitive amounts for marketing and 2018 and 19 and you can get 2018 at this point. Expand access to catastrophic coverage and when you look at those particular approaches you wonder why that isnt and why does that create adverse selection and if you look at the bill they are talking about the policies being part of the same risk pool and with the subject to many of the same applicable requirements guaranteed availability, no preexisting conditions and the like. Then, the last is forming the state waiver process and permitting great latitude to stakes to introduce reinsurance. When you look back on premium stabilization the risk quarters were financial problems and risk adjustment has been in a people and the one piece that seemed to work pretty well was reinsurance and yet that is now expired. Giving states the ability to stabilize the market for reinsurance features is probably a good idea from an insurers perspective. I will stop at this point. Thank you so much we will hold questions for the end. Next, we have a gene who is senior fellow at the Century Foundation and former Deputy Assistant to the president for Health Policy for president obama. Thank you very much. We will switch gears a little bit and pull back up and talk about why the Affordable Care act is havent word as well as how they can be improved. I do that because when you think about all the trials and simulations at the aca over the years and i think most pendant saw on the morning after the election the ac would not survive a year later. Yet, we are heading into the enrollment. And there is still a marketplace of people are still signing up and in large part it is working with improvements we made. I would like to discuss three factors about why the marketplaces have continued to operate despite what some people call sabotage by the initiation. First is a statutory design. When you look at the design of the Affordable Care act it was drafted learning a lesson from inform including state experiments and it was in short, designed to bring in three different people. First, people with preexisting conditions. People who were prohibited or barred from insurance because of practices that ensured the use of the nine coverage people who had preexisting conditions, medically underwriting the premiums, adding annual and lifetime caps on benefits that does a personally affected them and having the selected coverage of benefits for the benefits that were extensive or needed by or excluded. Those were prohibited by the portable correct and those people came in. Second, we included premium tax credits and subsidies to help the low income uninsured who were out because they couldnt afford it get into the individual insurance marketplace. Third, to help these high income, uninsured people who didnt really care for coverage but in this new world could get it whenever they needed it we had the individuals share responsibility requirement and if you can afford healthcare coverage, you should have it or pay a penalty, if not. Those three groups of people came together in this way to Health Insurance market places and despite claims when we were entering into that first tumultuous open enrollment in 2014, and claims now where we are entering this bit and tumultuous open enrollment given the policy changes this is know the spiral in the system. There actually cant be by design and that is primarily because of how the premium tax credit is design. The premium tax credit are linked to actual premium cost. When things rise, they rise and when they fall they fall. That means premiums are pulled up by having sticker people in individual marketplaces and so too are the premium trend [inaudible] in fact, if you look at 2017 a year ago there was reports about the high premiums and skyrocketing and this could be the end of the marketplace we now have data from the first couple quarters of 2017 that show that despite over 20 premium increases for 2017 the monthly claims costs have increased by only 2. 7 . Suggesting that it wasnt just the people who came in and we didnt lose how the people and the marketplace is still a decent risk and thats a new study came out today by brookings institution. Second, if premiums are forced up because of stock costsharing reduction payments as jewel just mentioned, they rise as well. We are now seeing new reports of the high rate of premiums going up over 30 in part because of the policy changes permitted by the administration and in the coming days if people begin to get the data released this week i think youll hear a lot about people with subsidies in premium tax credit been able to buy plans for free and they will have a bigger tax credit which could, again, bring in more young and Healthy People contrary to expectations. That is a structural to the legislative divide of the correct. Second, is careful regulations. We use every tool we have to engage experts, stakeholders, state officials, consumer groups that included white papers, conferences, request for information, advance notices, guidance because we wanted to have a very robust and learn the process to make sure we implemented things and changed it over time and while some people would argue that created uncertainty it also created adept to be. Most recently, for example, we did tighten up special moment rules and verification procedures for 2017 to 2018 and the Risk Adjustment Program we made changes that were requested adjusting for [inaudible] who may or may not be healthier and created a high cost risk pool where we have certain type of Reinsurance Program being paid out through the risk adjustment for people with claims over a Million Dollars and again, looking at the early performance for 2017 what we are finding again is that these systems may be working. It also looked at gross profits for the first two quarters of 2017 and found that compared to pre aca profits dropped in 14 and 15 and in 2016 they were about the same as they were before the Affordable Care act and now they are for the Second Quarter twice as high before the Affordable Care act. Again brookings analysis would say they have had there not been a starcrossed production had there not been the changes we actually could be seen single digit premium increases next year. Third, attribute some of this stability in the marketplace to the fact that it is working. I think there is some question about their arctic successes but the old and ministration is gone and the new and ministration as they are and are you defenders of the marketplace and our people like the insurance commissioners. Historically they mostly and bill can attest to this spend time complaining about the burden and complexity and all the things that we were imposing upon them yet, in september when there was bipartisan hearings on the aca they were star witnesses saying dont get rid of the portable correct, improve it and here are sensible pieces to do it. Similarly, Health Insurers we are not cheerleaders of the aca and we do not support this passage and they changed every step way in the implementation and i will personally say that last fall when these premium increases were proposed they were screaming to the sky is falling and they contributed to this debate this year about the imploding obamacare market place. Yet, in the last couple of months they, too, have used their voices and their influence to say we think this is working, dont get rid of it, improve it and coming to the table with concrete suggestions. I think the most obvious reason that we think these insurers are bought into the marketplace is there is not a socalled bear county in addition where insurers are just abandon it and the nation is covered and they will be offering open enrollment again and thats partly because insurers have recognized that there is something to be said for this place. Last but not least, this year and this is more about the legislative debate is a testament to citizen engagements. From the little lobbyist on the hill to jimmy kimmel to people really trying to understand and engage in social media about the Health Performance debate i think it has changed the nature of our Health Policy discussion so it is not limited to nationals like us but i have a right to an opinion and get involved and tell me what to do and how can i act. That manifested itself through the summer in the legislative fight in congress but i am cautiously optimistic that that also could be captured to help people sign up during the open enrollment. There are efforts to going on to figure out how you can raise awareness once you get the information out there about what is available to people and some counter to the uncertainty and confusion the consumer space going into open moment. Now, i will stop and say my former boss, former team, we were quick to say at the start all the way to the end of course no law is perfect and it can be improved. We learned along the way and there is much that can be embraced to make things better. From the start, for example, we thought the premium tax credit could be more generous and we really cut off in a pretty low level and there were a lot of middle income families the still cant quite afford coverage. Deductibles are often a barrier to access to healthcare and economists say a thousand dollars is good and roughly 2000 higher in the marketplace you could change that in policy higher costsharing reductions or linking premium tax credits rather than the silver plan you can target young adults in more efficient ways. Bump up premium tax credits. The corporation did an analysis that if you did of the dollar addon to premium tax credits for young adults you can get 1 million more young adults. Thats a policy that is not [inaudible] getting young people and by raising people so older people [inaudible] that is a saying that is young adults and get them in and Everybody Wins when they went. They went in the older adults due to when premiums go down. Joel talks about Reinsurance Program and every Major Insurance Company in this nation through the Part D Program has reinsurance. Reinsurance is way most well insurance works. Having a Permanent Program makes a difference. I will say it is hard to talk about these instructive improvements when the real catchword of the day is do no harm. Joel talks about the bipartisan healthcare stabilization act. Its primary benefit is preventing a step backwards. Apex the payments for at least two years and restores the outreach money for two years and does have some of the other policies that joe mentioned yet all of that positive should be enacted could be undone depending on the rules that come out of the executive order. If, for example, shortterm limited duration plans which are old policies from the pre aca days and three have but days in 1986 their policies that fought for three months were a couple of months in between jobs and issuer started filling them for 364 days a year and they are not regulated and if you think about that thats not longterm maturation but getting around regulation and trying to sell to people who otherwise could be underwritten in a positive way and that could undermine the market place. That is a sure way of saying we had to keep our eye on these executive actions because the congressional advances could be set back for their regulation. I will end by being cautiously optimistic. I think if you historically bet on what people would do for kate that would happen it should have been a much bigger disaster than it actually has been even going into this open enrollment. I do think that trying to focus on the positive improvement, the city state and things that havent been undone in the regulation and executive branch is equally important. Much. Thank you. Next, we have [inaudible], former general counsel at the moment of health and human services. Thank you. I want to start by complementing American University on this conference. The Affordable Care act was the culmination of 25 or 30 years of work by people on the hill, executive branch, just dedicated to this desperate one of them is jane, who you just heard from. She managed to pull all of them together in a single conference. You managed to do it in a very timely way. What couldve been a better time than right now to do this conference. There was an article in the Washington Post this morning about a woman who was trying to navigate her way to the complexities of buying insurance and i was just thinking as i was listening little does she know how complex it can be. At least she doesnt have to understand the difference risk quarters and reinsurance in order to purchase insurance. I was asked to talk about costsharing reduction. So, a single piece that has been the subject of a lot of news lately. From the first day in office, of president trump, the Insurance Agency an opportunity and everybody cares about the formal care act has been holding their breath because there was one thing that everyone thought the president could do if he wanted to destabilize the insurance market. That was two and costsharing reductions or as we call it csr. It didnt require regulation and it didnt require in order. All he had to do was decide he was going to stop defending a lawsuit that was in federal court and i will explain that as we go through this. First, let me tell you how costsharing reductions work. As you know, the Affordable Care act provided insurance in two ways, really. One was through medicaid, through expanding medicaid and the other was through making subsidize private insurance available to incomes, to individuals that otherwise couldnt afford it. What we are talking about is insurance. Insurance really had two different types of subsidies. One was the tax credit that jean just talked about. That is the system that has been paying premiums and how much assistance depends on your income but for anyone below four 100 of poverty they had available to them some assistance in the form of tax credit for paying their premiums but the second form which was really didnt get as much attention is costsharing reductions. These are available to some of the people who get tax credits, mainly those below 250 of poverty if they buy a specific plant called a silver plan, a midlevel plan they can get costsharing and costsharing helps pay copays and this is what you pay your doctor the part you have to pay when you go to the doctor, the Insurance Company pays the rest but also deductibles and coinsurance. Now tax credits are paid for by the United States so when you buy insurance on the exchange and when you pay your premiums you pay part of it and the United States treasury pays the Insurance Company the rest and it is all reconciled when you file your tax returns costsharing on the other hand is paid for by the Insurance Company so when you go to the doctor you pay part of the costsharing or maybe none of it but the Insurance Company will pay the rest and this is important because even if the Insurance Company doesnt get reimbursed for the costsharing it has to pay it in the law says the company has to pay. If they dont get reimbursed all they can do is raise the premiums in order to make up for that. Congress envisioned that the United States would pay the Insurance Companies every month for the amount they paid in costsharing but in order to reimburse the entrance copies the ministration had to have the money to do it and that comes through appropriations. Now, this is something i really wasnt aware of and there was a lot of things i wasnt aware of before i went to work as general counsel of hhs but this is certainly one of them. There are two kinds of appropriations. They are the ones we think about the annual up patients every year, congress, appropriate the money for the fda to pay the salaries to its employees and for it to pay the buildings and for the Defense Department to pay for muscles. Every year those appropriations are made and often it is a tense time because in recent years it always has a venture whether congress would appropriate the money and if they would have to close down. The money is appropriated every year there is a second kind of appropriation called permanent appropriation and those do not have to be made every year. Congress just says they are permanent. For example, the tax credit. All tax credits there is a permanent appropriation and congress doesnt have to figure it out every year it just has said you can count on them. Medicaid is another example where theres a permanent appropriations. The issue on the costsharing was that it was permanent or was it an annual appropriation. On the Affordable Care act through it is pretty clear everyone assumed it would be permanent just like the tax credits. Tax credits are permanent and these are bound together. The congressional budget offic offices job it is for any legislation to figure out what the cost will be they scored this as permanent so when the Affordable Care act was paid for congress had to come up with the money through tax increases and medicare savings and other ways to pay for the formal care act and they paid for permanent appropriations in terms of costsharing. As happens with all laws, really but happened with this law more than once the law wasnt as clear as it could have been and congress, once the administration in the obama and michigan started pain costsharing the house of congress [inaudible] in which they said we dont thank you have the authority to make these payments. We think this could only be paid if theres an annual appropriations and guess what, we didnt appropriate. There are a lot of issues about whether you can bring that lawsuit but in the District Court and in the first Level Trial Court level the judge ultimately ruled that they have to bring the lawsuit and ruled in favor of the house that there was no authority to make these payments on annual a provision. That got states of the payments have been made through the Obama Administration and through the Trump Administration until now. That lawsuit was pending on january 20, 2017 when the new president came into office and the big question was what he do. This is something the Insurance Agency cared about and if it was going to be stopped with pain for costsharing it was going to raise premiums and probably more important, it was going to add to the instability of the whole thing. The one thing that i learned and i think we all know and everyone in this room knows the Insurance Agency cannot live with uncertainty and their full job in their whole existence is predicting how many people will get sick and how much will they have to pay. It is really hard to do. But when you add the other kind of uncertainties that weve seen in the last year it is destabilizing and this was a big question. Since january 20 there have been, you know, conflicting rumors, weekly stories about what the president would do on costsharing and he was getting advice from the secretary of hhs from the cms administrator and maybe from his daughter, not to do it. And he was getting advice from his budget director and other white house advisors and elsewhere. If you want to end the Affordable Care act you dont even have to issue an order or regulation. You can just do it. Stop and tell the Justice Department to drop the lawsuit. Two weeks ago we got the answer. Costsharing will end and the government will drop its appeal in the dc circuit. It will abide by the District Court order and no longer make the payments. Now, as you know there is activity on the hill and the Alexander Murray bill which will store the payments for two years, 19 state attorneys general brought a lawsuit challenging the president s decision but on wednesday of this week federal court, at least initially rejected that lawsuit and said we do not think there is not enough farm for the court to get involved in the judge actually wasnt optimistic about how he would rule on the merits. This brings us to a really odd feature of costsharing which has to do with the interplay between costsharing and tax credits. You would think that if the federal government is no longer costsharing it would mean it would save money but appropriations cost money and every time that Congress Appropriates, it is spending money. Thats what an appropriation is. When congress doesnt appropriate and ends that program, then surely the government is saving money but that is not true here. In fact, the opposite is true. This has to do with the interplay the tax credit and costsharing and insurance premiums. As costsharing goes down the tax credits will go up. And it will cost the federal government more money. Jean alluded to this but if you limit costsharing, as i said, the cost of Insurance Companies have to pay it themselves and people still get costsharing if they buy the silver plan and they are eligible for it in under 250 of poverty but the only difference is the federal government doesnt pay Insurance Industry so the Insurance Agency raises the premiums and, as jean alluded to, tax credits go up. Tax credits are kept. They depend on your income and the way the law works you only have to pay a certain percentage for your Health Insurance. If you are already paying that insurance and youre in that category it doesnt matter to you how much the premiums go up because you dont have to pay that difference. Guess who pays it . The federal government. When we eliminate costsharing and we save money on that we spend money on tax credit and in fact, this is the killer we spend more money on the tax credit then we saved on the costsharing. The costsharing has been costing about 7 billion a year, i think and cbo estimates that the increase in tax credits from ending costsharing they estimated 200 billion over ten years. About 20 million a year. Do the math. It is not saving money but costing money. You know what else more people are now eligible for insurance so there will be more people for tax credits and there will be more people in the tax credits and in the long run if you put the turmoil aside you could argue that this isnt such a bad thing. This is one of the strongest arguments in the case in house verse four well. It had to be a permanent appropriations because it cant be that congress intended to do this annually and leave himself in a situation whereby not appropriating it would not and spending more money. That makes no sense. I dont know that theres ever been a statute like that. That is exactly the argument that the administration had one in the Supreme Court and in other aca cases and knows how this wouldve come out. I am not sure it will matter. Where does that leave us . The big concern about eliminating the question it will contribute to destabilizing the market. It will lead to less certainty by the Insurance Agency and increase the risk that insurers will exit although the numbers achieved gave you are encouraging and we lost insurers and that is not a good thing. We are still alive and in every place that sells insurance. First, the aca will not work unless the insurers stay in. When you look at the risk pool and the destabilization there are a lot of factors, how much hhs spends on ads, the expansion of the Association Plan, exemptions from the aca and this will be a piece of it. This matters but maybe not as much as everyone has said. I personally do not think ending chr will have the dire consequences many have predicted. It will make it more challenging to keep the industry calm and it will be a number of concerns that we need to have but it may not be the back breaker that everyone predicted. Thank you. Thank you. Next, we have brendan, at the university of Connecticut School of. Im going to turn on my microphone. Good morning and i will talk about a potential reform proposal involving adjusting the regulatory hurdles to the people who are currently employed purchasing insurance on the exchange. The core idea is i offer the claim that the exchanges with many but not all the reasons we might prefer using implement based insurance for the mechanism to deliver Health Insurance to people. The suggestion is that we modify the regulatory hurdles to keep 150 Million People locked in employment based insurance world and out of the exchanges while not throwing out the good parts of employment based insurance. The idea was conceptualized mostly before trump was elected. That reflects a certain assumptions about how policy is made and implemented and it may very well be that in this environment lets say this is not a congenial environment for nuanced counsel. That said, i will proceed. The idea generally is that there are certain goods we want people to have like Health Insurance and the markets on their own dont give enough of them and enough quality of them and distribute them properly. Health insurance is a classic example. The government wants to intervene, excuse me, to improve things and they have regulatory tools they might use. One of those regulatory tools is what i call employment based intervention which is a government based intervention that regulates the inclusion of some socially desirable in the labor deal with the aim of improving good [inaudible], better quality, stripping more fairly. The intervention can vary in the manner and magnitude of what it is comprised of. Why it might make sense to use in employment based intervention as a mechanism to improve Health Insurance availability, equality and support. We have to first ask what we are comparing the intervention too. Im imagining a world where everyone buys insurance on the open market. We imagine that world there are few reasons why employment based interest expense which i call sophisticated actors, Group Leverage and behavioral program. These apply to any social [inaudible] if i was a powerpoint i would object, as well to being used in the session. When this is over ambient will send me a ceaseanddesist letter. The idea is that employers are more sophisticated in purchasing Company Goods like insurance. Employers and they are better educated and more capital they can specialize and its there unlikely to improve outcomes. The other obvious benefit is using the implement based approach is that when you have a group and thats the processing unit that allows you to drive down cost insurance and get down adverse selection problems and this is a fairly wellknown benefit of using the Employment Group purchase unit rather than individual. I guess im having the third one is i think less recognized by a lot of people. Its a behavioral argument. Humans are imperfect decisionmakers and we often have trouble focusing our attention on committing resources to certain types of goods from a Company Goods are contingent on come due in the future. If you connect insurance to the paycheck brings it to your attention. If you connect insurance to the delivery of pay like the employment based system does then that is an administratively consistent time to [inaudible] and to consult with devices that make it such that if you dont end up buying the goods you lose some of the comp. Right . For example when you get Health Insurance and you dont accept it generally speaking your pay is not gross up. Lastly, the labor deal is a gallic fulcrum the use of defaults and choices were presented by the employer with different Insurance Options as opposed to going out on their own and look at a big impotent choice world to be paralyzed by the choice process. Now the flip side though is that if we think about why we like employment based insurance we also start to realize that its attractiveness is limited and may in fact be not attractive at all. Employers are more sophisticated than employees but is not clear they will deploy that sophistication in particular used ways connection a purchase of interest. One is although they might be more sophisticated than employees they are certainly not sophisticated to insurance completely may not be so good at checking deals. Second is if they are sophisticated they might use that dictation as way that is adverse to the interests of employees and one of the obvious ways materializes as the owners and managers of the business certain moral purposes but what should and should not be included in an insurance policy. We will have to regulate them to make sure that what they are doing is using theirs prosecution in a way that advances the overall insurance delivered to the employee. The next problem with employment based insurance is that employers are not actually in the business of producing interns. They are producing widgets and to the extent they provide insurance and they have residual administrative or liability obligations. That means there must be some sort of rules that govern their behavior and if there some sort of rules that govern their behavior the more onerous that becomes and employers will push back and say wait a minute, dont make this too hard for us or we will stop doing it. The alternative is world where people cant buy Health Insurance on their own and regulators will face a real difficult problem which is it will be tough for them to insist that employers follow harder rules because they will be met with a credible threat. I will attend the remedial powerpoint class, as soon as this is over. Another point that becomes very clear about the limits of employment based insurance is mainstream discussion of the effort to correct and hobby lobby. Even though its an economic matter the price of insurance is clearly a form of compensation and essentially an employee wage. Many people describe the insurance as being paid for by the employer but that is not so. There are two negatives to that. The first is that employees did not appreciate what the actual price of insurance was so when the price was something was salient that interferes with ideal decisionmaking but the second is that people assumed in many cases that the employer giving them insurance was providing gratuity and if you suggest to someone lets move away from employment based system and they think that employment based system has a gratuity of insurance moving away means to them were taking away a gift. Because the employment based system is not particularly good at making clear who is paying for the insurance and what the price of it is you cause something thats not conducive to people making our choices nor to stakeholders appeasing the merit of alternatives. So, lets talk about the Affordable Care act. Lets talk about what it does in respect to the individual marketplace. We will can pair the individual and market place. [inaudible] in short, it fixes the individual market but it keeps it locked and what we mean by keeps it locked. There are two locks. The first is if you are in Large Employer you have to offer insurance and if you have to offer insurance the employer mandate rationale is different than the individual mandate. The employer mandate was installed because of the fear that employers would change their behavior and that would be undesirable politically. Employers would drop coverage, people would be upset, alternatively, more sophisticated criticisms were like well, the players may drop coverage but then not raise wages because the theory of equilibrium wage differential says if you drop one work form of benefit another form should increase to offset. The worry was that you would destabilize the system and that there was not be an increase in wages because the workers were [inaudible] the employer mandate is one way to preserve the status quo. It says employers have to provide provide employerbased Health Insurance. The use of the tax system. Payment based Health Insurance [inaudible] non employment based insurance paid for post act tax dollars except for the Affordable Care subsidies. This creates significant labor pressure beyond the existence of a mandate on players who offer implement base coverage to serve as a vector for a tax break they cannot get if they do not get insurance in the workplace. Not changing the differential tax treatment on implement based insurance during the Affordable Care act passage serves to perpetuate the implement base system. Now, ask yourself if there are two systems, employment based system and Exchange System would now have. It doesnt make sense to have the locks on the employment based system. Lets think about whether we like the exchange pay system compared to the employment. The group levered advantage of the planet based system is largely dealt with in the exchanges. It might be the case because there is Community Rating in this pooling but it might be the case that better insurance is lost because the pool of people in the exchanges is smaller and sicker than insurers that employers and they also lack employers as negotiating agents. It may very well be that the creation of the individual market so absolute Group Limited opens but not all of them. The second is the sophisticated actor benefit of the employment based system is produced when you have intelligible marketplaces where people can make choices and not be overwhelmed by the decision to purchase insurance which can be difficult. Lastly, by removing, excusing, using an exchange pay system there is not an opportunity generally speaking for other ticket agents to get involved and take steps that are adverse to the engines of people buying insurance. So now, one thing about the individual exchanges that significant in terms of the difference between the exchange based approach in the employment based approach is that the behavioral fulcrum associated with employment based system is not there. In an exchange pay system if you move everyone to the exchanges there would be no connection between their paycheck and Health Insurance and there is no default and theres no constraint compensation of forfeiting part of your pay. You may also lose the fact that employers may have a superior understanding of risk not underinsured then if you put people in the market to act on their own. Let me skip regulatory fertility, just it is much better to have people buy things on exchanges then through their employer than writing the text to the cost of something is the single best way to appreciate exactly what it cost and exactly how it is buried. So, what reforms might we consider to capture the benefits of the employment based approach but also use to changes to use an incremental path forward that improves outcomes for everyone. The animating idea is to convert the employment, entrance into a funding mandate. It gives employers the option to instead of providing insurance the option of funding for all fulltime employees in exchange for an account with a stipend equal to the amount by the employer but no less than some minimum value that ties a median value on the exchange selected by regulators. We need to pay for the insurance. It frees them. From meaningful administrative administrative and legal which under the Affordable Care act are considerable. For Companies Already offering employerbased insurance that amounts to an funding employee accounts which wouldve been funded to an Insurance Company. You make the cost more salient to employees and ensure the collective wages of the employees used by Health Insurance would go down to the benefit of all employees equally. Lastly if the employer mandate was lifted companies who declined to offer insurance would face immediate pressure. s, ties the insurance fortune of labor to those with management while discouraging management to be stingy. A lower stipend would deny tax advantage when purchasing a more generous policy. That means the most highly compensated employees such as management. That would their this is constrained station. Average my time. Its constrained compensation because their forfeiture and consequences of an employee choosing to purchase a less generous policy that will come back to understand sure not sure. Allows her worker choice. Finally, this would swell the ranks of the exchanges. The make it more likely to attract insurers to a bigger and healthier pool. The influx of employs into the exchanges might to a lot of work to solve problems we have about five ability and stability of exchanges without resorting to other measures that have attracted considerable attacks. Its conceivable but unlikely a large knife shift went to the exchanges it could reduce the need for an individual mandate. I dont think that will happen. But maybe in the interest of federalism there might be states that would take that approach. Thank you. We have about 25 minutes for questions and ill take moderators. One followup question, a surprising result from the Affordable Care act is the popularity of medicaid. We talked about employerbased insurance is quite popular among people who receive it. In light of your changes, how might that opinion playing . Public opinion is interesting we talk about insurance and benefits. There is evidence that people dont appreciate the existing mechanism. So the example of a someone say get government out of my medicare. Is people referring to the idea of the employer paying for Health Insurance that totally lacks from the appreciation of economic reality. One of the benefits of being a policy nerd is that i frequently have no advice to offer people that messaging questions. I dont know, i think being direct is a good idea because even though their shortterm thing people learn that they understand the system better and prefer Less Government involvement but at least i want them to have an understanding of what is happening now before they reject changes in the future. Finally, i would like to point out this idea was an effort to get a conversation started. Nothing personal say its better than any alternative i could think of. Whether its all these other proposals, but this i thought might be an incremental way forward that could attract attention to be part of a larger discussion. Thank you. Whenever people bring up the tax inclusion for Health Insurance which i teach my Health Policy class its extremely aggressive but extremely popular. Its a challenge. Secondly, i want to return to the issue of cfrs. Yesterday a Panel Discusses and try to put in context how many people are affected. The small proportion of the population received Health Insurance on the marketplaces in the subset of that would benefit from the csrs. But elaborating about how the refusal of payment an increase in premiums and the increase in tax credits could be a good thing. One thing talked about yesterday was how Insurance Companies increase their premiums to the patient but then also may benefit from the restoration and have increased premiums and tax credits and restored costsharing. But if you could also reflect on the people who are not receiving premium tax credits those are the ones hurt by the increase in premiums. I dont know if thats true. The increase in most states is just for the silver plans. Just a single type of plan. If you dont have tax credits youre free to go by one of the other plans. Theres no logical reason there should be an increase in i dont think there is. Also 80 of the people on the exchange receive tax credits. So theyre the ones that are fully protected from these increases. This issue about sense the premiums are builtin, what happens if Congress Appropriates the funding for 2018 . The bipartisan belted building rebates of the idea would be to say the state insurance commissioner could provide monthly rebates to consumers during the year, or a lump sum after 2018 return that money to consumers, with the important change being that it requires insurance to return some of that to the federal government which is why the bill mostly saves a billion dollars. I heard the remark about the idea that if no legislation is introduced and credits are increased and yet the Health Insurers with still have the ability as a legal matter to come back and claim the unpaid csr payments. I havent done the analysis of the law but it wouldnt be a great position for most insurers to be in. Road worry about it more might be insurance new entrance on the brink and if they saw it as a potential source of funding maybe its worth trying to get a court to agree they might make that effort. State insurance departments would want to jack up rates on oneyear on the premise the costsharing was absent and at the same time trying to recoup monies as a legal matter from the federal government later on. The idea the lawsuit the statute said the federal government all the money. It didnt pay it and they can go into court and recover it. Its impossible to know how that would come out. Joe said some interesting, one of the things insurance people tell you assuming you can stay awake long enough to hear their sentences, is that good risk pricing and pooling leads to good policy. They want to price risk and get good pools. Anytime theres a proposal that will operate and undermine those things their ability to price or insurer pools, if you segment pools that undermines their ability to write policies they have confidence in, youll do damage to a private player to ensure in a stable way. The frustration about the proposals that come out said it doesnt appear to be an appreciation that certain approaches are nothing more than a way to undermine pools. That worries people who knows what happens when he undermine pools. Not because you have an objection to thinking outside the box, but if you destroy a pool because you think it will cause competition for prices will drop, thats why experts heads explode. This like we have to relearn that were trying to figure out what path forward will follow. Something that a lot of people believe is if you dont pay close attention to how it does work any of rules that make it not work, that will make the stage welcoming to a nonprivate insurance approach. Some people are in favor of but many people suggest rules that undermine the system will not be in favor of. There is an irony and how policy might evolve. If youre trying to create and maintain a good pool, then you need to create incentives for younger folks were good risk to stay in the pool. If the rating methodology is an accommodating enough then they will find appealing alternative pools and products which may be will be available down the road. But when you talk about how do i improve the singular pool, what is Community Rating and i know there were proposals to try to move from a 3 1 ratio to a 5. Others said you cant do that. Its difficult with the existing constraints to make the improvement to keep the good healthy pool in place. Jeans idea about increased premiums for younger people, right now students, people up to age 26 can say stay on parents insurance. So having incentives to get them back on. I want to add to the debate, the same study that talked about dancing, that would be the impact of keeping the three to one age rating and covered as many young adults without losing older adults the higher rating at a lower cost of the federal government. If you increase that 5 1 then it all goes up. We should use the moment to look at alternatives. It seems easier to say deregulate but demand up costing more than alternative rac ways. I want to open it up to audience questions. Please introduce yourself. Michael cook, medicaid in virginia. One of the major issues that will arise, though i agree 100 in effect some folks have taken a look at it the skies and falling with the csr but on november 1 member of the public and we have an election on november 7, you will see blowing up, these astronomical premiums that probably wont hit you and we have 90 of the money pulled on providing resources to reach out to folks. Obviously, you look to possibly get in the governor for someone in the state to start doing Public Service announcements. That will be a real issue. Actually raise the idea of getting rid of the employerbased insurance at one point in the campaign and even before that. I promise you, i have been promised you will take off every Interest Group imaginable if you do that. My mom thinks its an excellent proposal. I, having lived through many moments including less fall which was brutal and not as brutal as this one would be the 24 last june 304 issue, the Public Impact of scare value of the unsubsidized number that would affect probably a couple Million People is a tiny fraction of the u. S. Population outweighs the real world impact. Some people argue not to restore csrs because then you have a tradeoff. I personally and for the targeted subsidies for that reason. One thing i did mention this part of our challenge is to keep insurers in these counties, they are monopolies that can charge whatever they want in the premium tax rises with it. People look at ideas like can you limit this, but we do have a problem without competition within monopoly insurers. Those premiums are way too high. We are most loss, but for the strenuous efforts of the governor and are two senators, we almost lost that. I have a hypothetical i met lawrence. I have hypothetical question one or two years from now the nine appropriate csr equilibrium where there is silver loading in places places are recalibrated to be more generous to get a credit but less generous for those who dont. Can you talk about the hypothetical world and is that were insurance say, do not fund this. Is that a world the politics of that wind up paying out . They saying dont fund it or what is that world look like . Insurers are really from the current dilemmas and havent thought too much about what it means for the future. The idea at the end of the day is to have Consumer Engagement regarding the cost of healthca healthcare, having the issues of rising premiums been resolved to the premium tax credit may not be the best way to get there. Many insurers believe that if you cannot inform across healthcare you need three pieces. One is the access and the other is changing how providers are compensated and then how do you engage consumers so their interest in the cost of care and the policies Going Forward would consider all three elements. I think its a debate right now. Having the csr is paid for through premium tax credit, their if you read the tro theres a decision by california judge and he weighed in on it said part of the reason why he didnt want to disrupt is that he thinks predominantly lowincome people are better off under this plan then he would be should intervene. Its an economic and insurance debate. Its a great question and i think as you can tell nobody knows the answer. What we are hearing is that perceptions are really important. This perception of rising insurance rates is a killer. Even if it doesnt apply to a small number of people its a killer. Arguably if they were put back in insurance rates would come back down thats not such a bad thing as a Public Relations matter. Two different question in terms of policy matter and coverage. Mobile statisticians. I want to come back to the thought i found it interesting the presentation. Both in terms of saving aspects of the individual market would be nice the employees could shift over. Many small states, the insurance pool is not large enough to guarantee decent competition. So having people for employees going into the individual market would stabilize the markets. When you talk to labor economist its no secret that employer insurance decreases labor mobility. You go to any Large Institution like my university anyone ever go to smaller employer simply because they get the insurance for the family through the Large Employer. So theres these negative employerbased insurance problems that we never talk about. Part of the conversation about the approach the United States to take delivery of Health Insurance to people has to be broader than any 15 minute Panel Presentation could consider. Every suite of tools you use will have problems that another might not have, just so happens that most of the countries have considered the tool with the least amount of problems this heavy government involvement. Its not clear to me thats a path forward. Not because i object to the because i think theres more serious conversations to be had for many years the National Conversation has been locked in what i perceived to be not really serious discussions about ways to solve the problem regardless of whether or not theres merit to the idea. Ill follow up with the medicaid buying question. Its been debated in more attention in the news there is talk about a public option and its part of a medicare buyin and in nevada it almost went through but the governor vetoed it. I love to hear the panels thoughts on that. As a political matter, its exciting for the first time theres a medicare by. Thats a result of the fact that this year in the throes of the repeal and replace bill when medicaid per capita cap was put on the table and the expansion of medicaid couldve been repealed, people began to understand and talk about it in ways that it hasnt been spoken about. I think the flip side, the monopoly in virginia where the fear of counties without Insurance Plans all year long the limited competition in some of these areas have led to private insurers wont fill these gaps so i not look at medicaid the members of congress plan, theres been state employee buyin, is apparently to fill the gaps and people think medicare is not a dispensary and their Insurance Plan is going up. Its been driven by gaps in the system as well as price and affordability gaps. Whether that can be welldesigned. And a 2009 it was not easy to figure out these proposals. The complexity is greater than a buddy thanks. Im not too surprised giving the current debates thats resurfacing. Its interesting to see if any state reforms take off like nevada. Im sarah with bloomberg laws healthcare news division. Does anybody have a sense of what the difference in cost to the government from allowing people to buy into medicare or medicaid as opposed to subsidies provided under the aca . There hasnt been a lot of Research Done figures. There is a rich debate in 2007, eight, nine, ten and the Congressional Budget Office to do public plan option estimates both during the Affordable Care act debate. Thats the word. The challenge now is that we dont know whether the marketplace plans look more like commercial plans or medicaid plans. It looks like medicaid matte mel plan it could be at or below but if it looks like a employer care the rates could be more. One observation is typically with medicare, advantage and maybe other federal programs there are good models with the federal government helps facilitate the market and creates a competitive market among the insurers were insurers can make informed choices. For the Affordable Care act and markets has not succeeded a Business Model competition for several reasons. Some of the proposals may be tradeoffs, if its not that attractive furniture to interpret rule market, feel part of the bigger market that might be a quid pro quo. What lessons can we learn from the Affordable Care act in terms of competition. What are good examples of competition the federal Health Benefit program and can we borrow anything from those . Thank you. When you think our panelists for great discussion. And thank you for coming earlier before the talk. I want to thank the Washington College of law for hosting us. We have a 15 minute break prior to this talk. [applause] [inaudible] [inaudible] good morning. It is wonderful to feel such energy in this room. My name is camille and im honored to be the teen of american urs

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