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BPC Comment Letter on Affordable Care Act Regulatory Burdens and Market Stability

“The Bipartisan Policy Center appreciates the opportunity to submit comments on the Centers for Medicare and Medicaid Services’ (CMS) request for information concerning changes to Patient Protection and Affordable Care Act (PPACA) regulations that could promote increased stability of the individual health insurance market and affordability of coverage. Earlier this year, BPC convened a bipartisan group of leading national health policy experts to identify a path forward for a consensus approach to improving health care in the United States. With the assistance of this Future of Health Care panel of experts, BPC stands ready to work with CMS and Congress to advance policies that will improve access to affordable health care and insurance coverage in America.

BPC stands ready to work with CMS and Congress to advance policies that will improve access to affordable health care and insurance coverage in America.

“Although maintaining stability in the individual health insurance market has been a challenge during the implementation of PPACA, early indications suggest that the risk pool may have begun to stabilize in 2016 and 2017. After initially escalating in 2014 and 2015, average medical loss ratios (MLRs) for individual market plans declined in 2016, and fell even further in the first quarter of 2017,1 indicating improvements in medical claims experience relative to premiums. After incorporating the significant premium increases of 2017, market analysts have projected that, absent other changes to the market, most individual market insurers should achieve close to break-even financial performance in 2017.2 In addition, CMS data demonstrate that risk scores for individual market enrollees stabilized in 2016.3

“As a part of its recent Market Stabilization Rule, CMS finalized several changes for the Health Insurance Marketplaces (hereinafter Marketplaces) that will be implemented in 2018 and could further improve financial performance among individual market insurers. CMS is also requesting regulatory waiver applications from states seeking to innovate their individual market insurance models. If structured properly within the framework of important guardrails, such state-level changes could help to stabilize premiums in the Marketplaces, as could the Market Stabilization Rule’s policy to delegate exclusive authority over individual market network adequacy standards to state regulators. In 2015, BPC recommended several policies to improve state flexibility in the individual market. BPC will continue to examine the issue as a part of our Future of Health Care efforts.

“However, given that the reformed individual market has not fully matured and that political uncertainty surrounding ongoing PPACA implementation is likely to complicate that market maturation process, BPC agrees that additional regulatory actions by CMS could be helpful in stabilizing the market. Such actions, in conjunction with legislative fixes where necessary, could help control future premium cost growth in the individual market.

“In this letter, BPC highlights several policy changes that CMS should consider.”

Kaiser Family Foundation, “Insurer Financial Performance in the Early Years of the Affordable Care Act,” Figure 1, April 21, 2017. Available at: ; See also Kaiser Family Foundation. “Individual Insurance Market Performance in Early 2017,” Figure 1, July 10, 2017. Available at:
2 Banerjee, Deep, “The U.S. ACA Individual Market Showed Progress In 2016, But Still Needs Time To Mature,” S&P Global Ratings Direct Report, April 7, 2017. Available at:
3 Centers for Medicare and Medicaid Services, “Summary Report on Transitional Reinsurance Payments and Permanent Risk Adjustment Transfers for the 2016,” 4-5, June 30, 2017. Available at:
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