State insurance head asks Congress for 'flexibility'

WASHINGTON – Tennessee Insurance Commissioner Julie Mix McPeak urged Congress on Wednesday to give states more power to regulate their insurance markets.

Testifying at a Senate hearing, McPeak stressed that congressional Republicans should return as much flexibility to the states as possible as they move forward with plans to repeal the Affordable Care Act, or Obamacare.

Additional flexibility would help states tailor insurance regulations to their own unique markets and could help provide stability in states like Tennessee, where the individual market is struggling, McPeak said.

“Tennessee’s experience, which is likely not unique, suggests a need for policy changes,” McPeak said.

McPeak was one of four witnesses who testified before the Senate Health, Education, Labor and Pensions Committee about how to stabilize the individual health-insurance market as Congress plows ahead with plans to repeal and replace the Affordable Care Act.

Also testifying were former Kentucky Gov. Steve Beshear; Janet Trautwein, CEO of National Association of Health Underwriters ;and Marilyn Tavenner, president and CEO of America’s Health Insurance Plans.

The committee’s chairman, Sen. Lamar Alexander, R-Tenn., said 18 million Americans in the individual market are facing an “Obamacare emergency” and that without quick action, many of them will be left without any choices for insurance next year.

“These are all real people, and they are in trouble, at least they are in my state, if we don’t take some steps,” he said. “We’re going to have to take some action pretty quickly.”

Tennessee insurance commissioner: Obamacare exchange 'very near collapse'

Democrats on the panel, however, accused Republicans of throwing the individual insurance market into further disarray by threatening to repeal the Affordable Care Act without having a plan to replace it.  The panel’s top Democrat, Sen. Patty Murray of Washington, blasted Republicans for creating what she called “Trumpcare by sabotage.”

In Tennessee, McPeak declared last August that the state’s Obamacare insurance exchange was “very near collapse.” In her testimony Wednesday, she again stressed the state’s individual insurance market is struggling.

Just three insurance carriers – BlueCross BlueShield of Tennessee, Cigna and Humana – offer policies on the state’s federal exchange, she said. In 73 of the state’s 95 counties, particularly in the more rural areas, Tennesseans have just one insurance option on the federal exchange.

Under Obamacare, insurance rates in Tennessee have increased steadily since 2014, McPeak said. Premium increases ranged from 7 to 19 percent in 2015; rose as high as 36 percent in 2016; and ranged between 44 and 62 percent for this year.

In short, she said, Tennessee has fewer insurance carriers, less competition and higher priced premiums under Obamacare.

Asked for suggestions on how to stabilize the market, McPeak urged Congress to give states more freedom in choosing a base set of benefits to be offered in standard insurance plans while allowing more flexibility in designing other available plans.

That approach would allow consumers to select from broader benefit plans while also potentially providing an option to select a limited plan that would still cover the basics, such as hospitalization, physician benefits and mental health care, but may not have all of the benefits currently required under the Affordable Care Act, she said.

The challenge facing Congress is to implement reforms without disrupting an already distressed marketplace, McPeak said.

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Insurance markets don’t respond well to uncertainty, she said, and if the regulatory landscape for 2018 is still unclear by the time insurers have to decide what products to offer consumers next year, carriers may pull back from areas where they currently sell policies.

In Tennessee, that could leave consumers in parts of the state without any insurance options on the federal exchange in 2018, McPeak said.

Under questioning from Alexander, McPeak said Congress needs to act by March so that insurers will know what to expect as they prepare for 2018. Under current law, insurers must submit the benefit plans they will offer next year to the state for review before May 3.

Beshear, the former Kentucky governor, pleaded with lawmakers to consider the consequences of rushing to repeal the Affordable Care Act without offering a comprehensive replacement. More than 500,000 low-income Kentuckians were able to become insured under the law, he said.

Repeal without a broad, comprehensive replacement will cause millions of Americans to lose their insurance, Beshear said, “and many will die.”

While McPeak was in the hearing in Washington, Tennesseans from four cities were livestreaming their testimony about how coverage under the Affordable Care Act has impacted their lives via Protect My Care. The organization is led by a group of Tennesseans who are frustrated by efforts to get federal lawmakers to listen to ordinary voices, said Jackie Shrago, who works as a special projects coordinator for the Tennessee Health Care Campaign.

McPeak said via email after the hearing that there would need to be state and federal legislative action for Tennessee to establish a public insurance option on the individual market alongside commercial carriers – an idea proposed in the hearing by Sen. Sheldon Whitehouse, D-Rhode Island.

Holly Fletcher of The Tennessean contributed information to this story.