NEWSLETTER: Washington Needs to Stabilize the Markets to Move Forward on Healthcare

After a season of healthcare policy fits and starts, now is the time for Washington to take a collective deep breath and assess what we learned and how we as a nation can do better.

I say “we” because if the objective is truly a high-performing, affordable health system for all Americans, then everyone has a role to play—patients, providers, purchasers, health plans and policymakers of every stripe.

First, what have we learned? Americans do not want to go backward. Let’s address the flaws in our system, including the far-from-perfect Affordable Care Act, but let’s not increase the number of uninsured, push up costs or create chaos in the market. Incremental improvement—focused on tackling underlying costs and drivers such as social determinants of health—offers the best chance for consensus.

Market stabilization is central to long-term success. Not-for-profit community health plans are invested in the places where they operate; they don’t pick and choose markets based on financial return. But even not-for-profits need robust, stable markets to remain viable and continue to provide affordable coverage. When a Republican Congress enacted the Medicare Part D program it included three market stabilizers—risk corridors, reinsurance and risk adjustment—which 14 years later continue to help that private market serve millions of seniors.

Similarly, market-based strategies are needed today and a critical first step is for Congress to guarantee the ACA’s cost-sharing reduction payments. Rather than being a government bailout, these payments help millions of working Americans, on average earning $19,000 a year, afford deductibles and copayments.

Well-designed reinsurance programs can enable community-based plans to improve access to care by helping states cover the costliest patients. Giving states flexibility on risk adjustment will level the playing field so that smaller, regional health plans can compete. And to have any hope of a robust risk pool, plans need every available tool to encourage broad participation. This includes both carrots and sticks.

We must also encourage innovation to ensure a 21st century healthcare system that works for physicians, patients and payers. Thoughtful implementation of the ACA’s waiver authority will allow states to tailor programs while maintaining coverage levels achieved under the ACA. For example, Minnesota and Alaska will use federal dollars for reinsurance programs to offset the costs of the most complex cases—keeping premiums down for everyone. Providing certainty to our health plans enables them to get back to the business of improving the health of their communities, not fretting over the next shock wave to come out of Washington.

Any future action must maintain coverage gains and consumer protections such as essential health benefits. All health plans should be encouraged to experiment with payment and coverage models that promote value-based care, which is good for the patient and the purchaser. Plans should have the flexibility to innovate—for example, through telehealth or arranging home-care services. If grandma can FaceTime with the kids, why not make it just as easy to have a virtual visit with her doctor?

A major contributor to rising premiums is the outrageous cost of prescription drugs. We can start with transparency in pricing, including the bipartisan FAIR Drug Pricing Act. Disclosure of research and development costs—as well as advertising and marketing—is a fundamental first step in creating a competitive and effective pharmaceutical market. Streamlining the Food and Drug Administration’s generic and biosimilar drug approval processes, along with closing loopholes now employed by brand manufacturers, would increase access to valuable, lower-cost products, ensuring affordable alternatives are available.

It’s time for our nation’s leaders to rise above petty politics and come together to make lasting improvements to our healthcare system. And it’s time for us as leaders in the industry to play a key role in advancing those efforts. Market stabilization, affordable coverage, flexibility and innovation are all part of the equation. Let’s prioritize the health of Americans and a 21st century healthcare system that works for everyone.


– Ceci Connolly
President and CEO

This blog originally appeared in Modern Healthcare.