Energy and Commerce Ranking Member Frank Pallone, Jr. (D-NJ) delivered the following opening remarks at a Health Subcommittee legislative hearing on “Advancing Patient Solutions for Lower Costs and Better Care", which included several bills that would undermine American’s access to health care coverage under the Affordable Care Act:
Good morning and thank you to the witnesses for being here today. We passed the Affordable Care Act to ensure that all Americans had access to affordable, quality health insurance. The goal was to achieve universal health coverage. Six years later, our uninsured rate is at an all-time low, and our uninsured rate among young adults has dropped by 47 percent. Twenty million more people now have health insurance. And, a new University of Michigan study shows that the ACA has reduced racial and ethnic disparities in coverage.
This is all good news, but we have more to do. I believe there are ways we can strengthen and improve the law. However, I’m concerned that this hearing is taking a cynical approach to doing so. Rather than have a legislative hearing on bills that would help get more people health coverage, three of the bills being discussed today are designed to make it more difficult for people to get health care coverage.
One of the bills we are reviewing today would allow insurance companies to charge premiums that are five times as much for older Americans. Even more troubling, under this bill a state could establish an age ratio even higher than 5 to1. Many older Americans cannot afford to pay five times as much as people who are younger than them. And we purposefully included in the ACA ways to ensure that younger people have access to health insurance, such as staying on their parents’ plan until age 26. I’m concerned this will force older Americans to go without coverage at a time when they need it the most. There are also potential unintended consequences. Studies have shown that a 5 to 1 age rating band overcharges older consumers and undercharges younger consumers. Meanwhile, the increased tax credits to accommodate these higher rates for older Americans could cost billions of dollars.
Another bill we are reviewing today would make it more difficult for people to enroll in coverage during a Special Enrollment Period, known as an S-E-P. SEPs are necessary for people to enroll in coverage when something changes in their lives outside of the open enrollment period. It is important for SEPs to maintain some flexibility so that individuals can get coverage in a reasonable amount of time as they transition through important life events such as the birth of a child, marriage, or a permanent move. We have heard from insurers that SEPs aren’t strict enough and are subject to gaming. And that is why the Administration has taken major steps to prevent this. They have eliminated 7 SEP categories and now require documentation to prove SEP eligibility for the five most common life events. In addition, starting June 17th, CMS will require individuals asking to enroll in coverage through an SEP to provide documentation by a specified deadline. The individual will lose their coverage if the appropriate documentation is not received in time or is incorrect. These are reasonable guardrails.
Yet, although CMS is implementing stricter verification requirements, this bill goes a step further and requires someone to prove their eligibility for an SEP prior to gaining coverage. I am concerned that collecting and submitting this documentation may prove difficult and could lead to gaps in health coverage. Cancer patients cannot wait a month to get their health treatments. In addition, the Urban Institute estimates that fewer than 15 percent of people eligible for SEPs use them to enroll in marketplace coverage and the rest are likely to remain uninsured. I worry that stricter documentation requirements could deter all but the sickest individuals since they are the most motivated to get coverage, while healthy individuals may choose to remain uninsured. Creating more barriers to access will only serve to keep more people out of the insurance market.
I’m also concerned by the bill that would shorten the grace period for those lower-income Americans who qualify for tax credits. Grace periods were put in place because many of the people who are signing up for health insurance are doing so for the first time. The population that is eligible for tax credits is also lower income and has more fluctuation in income, which is why we wanted to give them a chance to keep their insurance as part of the ACA. Under the bill before us today, just one missed or partial premium payment would result in someone losing their coverage until the next year. This isn’t good for consumers and it’s not good for the risk pool to create even more uncertainty in the marketplace.
If we want this new system to be a success, we have to ensure we are doing everything we can to stabilize the marketplace. I’m disappointed that these bills we are discussing today will do the complete opposite. As we discuss ways to improve the Affordable Care Act, we should be exploring proposals that would expand access to health insurance. This would be good for the health of our citizens and our health care system.
Thank you, I yield back.
