The Hickenlooper-Kasich health care plan: Here’s what you need to know

A coalition of eight governors, led by Colorado’s John Hickenlooper and Ohio’s John Kasich, put forward 18 recommendations Thursday and demanded immediate action from Congress to stabilize and lower costs on the individual health insurance market.

The bipartisan blueprint seeks to break the gridlock in Washington on the issue of health care with modest fixes, but it faced criticism from conservatives because it would preserve the Affordable Care Act and individual mandate.

“We are not trying to start a revolution here,” Hickenlooper said in announcing the plan at the Capitol in Denver. “These are very cautious, pragmatic efforts to maintain the stability of the individual market, which will almost certainly reduce premiums (and) which will almost certainly expand coverage.”

Here’s a look at the proposal and the prospects that it advances the debate in Congress:

The main point Hickenlooper, a Democrat, and Kasich, a Republican, want to make with their plan is its bipartisan nature.

The two governors organized opposition to the House and Senate health care legislation earlier this year because Republicans did not incorporate enough bipartisan input and shifted too much of the cost to the states.

Still, their proposal is only bipartisan to a point. Only one other Republican governor endorsed the plan. The others are Democrats and one independent, Alaska’s Bill Walker.

Republican governors who co-signed letters with Hickenlooper and Kasich earlier this year declined to endorse the most recent proposal.

The plan focuses on how to keep and fix the current law, rather than repeal and replace it.

The focus on the individual market is intentional — it’s the most immediate need as insurers craft their 2018 benefit plans in September. But the individual market is a small part of the system, accounting for about 7 percent of the insured population, according to a Kaiser Family Foundation analysis in 2015.

The governors want Congress to act swiftly to help reassure insurance providers about the market and avoid steep premium hikes for exchange plans, which are expected to increase an average of 18 percent next year.

“You have to stabilize the markets because things are in a frenzy and the markets could melt down and millions of Americans could lose health insurance,” Kasich said Thursday in a CNN appearance with Hickenlooper.

The recommendations ask the Trump administration to commit for two years to preserving cost-sharing subsidies to insurers who reduce the out-of-pocket costs for low-income people receiving care.

The other major proposals recommend that Congress:

  • Fix the so-called “family glitch” that prevents some from receiving tax credits because one member is eligible for coverage through an employer.
  • Increase health insurance choices in underserved counties by exempting insurers in those areas from the federal health insurance tax on their exchange plans and allowing people to buy into the health care program for federal employees.
  • Make it easier for states to seek exemptions from federal law to find innovative ways to save money and improve the system.

One idea that Hickenlooper and Kasich borrowed from the Senate Republican bill would create a $15 billion pot of money for two years to help states develop reinsurance programs. The goal is to reduce premiums and limit losses for insurers who cover the sickest — and most expensive — people.

The governors’ proposal said the cost of the fund must be offset so that it wouldn’t add to the deficit. But they never recommended how it pay for it — one of many elements in the proposal short on details. Senate Republicans offset the cost with cuts to Medicaid coverage.

One reason the proposal is so narrowly tailored is politics.

The other issues are too polarizing to reach bipartisan agreement. The plan does not touch Medicaid, nor does it substantively address two major cost-drivers, prescription drug prices and the cost of hospital care.

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