Sen. Cassidy shares insights on ACA, HSAs, benefit taxes
Since taking office in January 2015, Sen. Bill Cassidy of Louisiana has made fighting for brokers one of his priorities.
In June 2015, the Republican introduced legislation in the Senate, Equalizing the Playing Field for Agents and Brokers Act, which called on the Centers for Medicare and Medicaid Services to provide similar resources to brokers and navigators selling in the Affordable Care Act’s marketplaces. While the bill was stuck in committee, Cassidy — who is a physician — was instrumental in pushing CMS to provide brokers with newsletters, an 800 phone number and webinars.
Last week, Cassidy, along with Sen. Susan Collins (R-Maine), introduced a proposed replacement to the ACA. The Patient Freedom Act would allow states to decide their future by keeping the ACA, switching to a different insurance expansion or going forward with no coverage expansion at all. A similar bill, written by Cassidy and Rep. Pete Sessions (R-Texas), called The World’s Greatest Healthcare Plan, was also introduced in the House.
EBA spoke with Cassidy to understand his view on how brokers can be fairly compensated for their work and what happens to the ACA. What follows is an edited transcript of the conversation.
EBA: Agents and brokers are worried about their commissions from carriers in the Federally Facilitated Marketplace. As an example, I’ve spoken with a few agents who had to lay off staff because insurers aren’t paying commissions. Some broker camps advocate that brokers should see commission-free relationships with health insurance carriers as the way of the future and adjust their business accordingly, while others want to fight for regulations (such as altering the ACA’s medical loss ratio provision) that they see as helping to keep the traditional compensation structure in place. What is your take?
Cassidy: What is underappreciated is the tremendous value brokers bring to their clients. They are always considered as almost kind of unnecessary, but clearly brokers bring tremendous value by not only guiding people through, but putting them, in the correct place.
The replacement that I have proposed for the Affordable Care Act, the Patient Freedom Act, would give more importance to brokers because they would be helping folks receive their tax credit and choose the plan best for them.
You have to compensate brokers for their knowledge. The best form of that compensation is to be worked out by brokers and insurance companies. To pretend that we could have a functioning system without somebody to help the beneficiary choose the best product is to not appreciate the complexity of the current market. I don’t have answers except to recognize the value brokers bring and legislation we put forward will not just recognize that but enable it to be rewarded.
EBA: Part of your ‘level the playing field’ broker bill requested CMS include navigator-provided resources to agents and brokers. They now have an 800 number, webinars and newsletters. But what else would level the playing field? What is next for this bill in the GOP-majority Congress?
Cassidy: It is tied up with what we do about replacing the ACA. The special status that navigators had under the ACA is unlikely to continue. Before I answer that question, I think we have to see where our replacement goes, because it is part of our larger picture and right now it is unclear in which direction our replacement goes.
EBA: Do you think having a GOP-majority Congress will help push through an ACA replacement?
Yes I do, but on the other hand within the GOP there are differences in how to proceed. It is going to help GOP bills pass. But which GOP bill passes is now the question.
Under the Patient Freedom Act that Susan Collins and I put forward and similar legislation in the House, the World’s Greatest Healthcare Plan — Rep. Steve Sessions (R-Texas) and I wrote that — there will be lots of room for brokers to assist beneficiaries in getting appropriate insurance for them. Inherent in that, brokers are compensated for their work. In other plans from my GOP-colleagues, it probably does not work out as well for beneficiaries or brokers. Under our plan, we give patients the control over their health deposits, via their Roth HSA, and emphasize patients shopping for the best plan. Agents and brokers who are effective at helping patients find the plan that fits them best will be able to succeed in such a competition driven health care market.
EBA: You and Sen. Collins proposed the "Patient Freedom Act" this week. The PFA would change the tax treatment of HSAs and critics say that puts these health savings vehicles at jeopardy at a time when employees are increasingly being asked to shoulder more of the health cost burden. Overall, it’s a top concern of both broker and employer organizations that the tax-favored status of workplace health insurance coverage not be put at risk. Can you explain your position on the tax-preferred status of employee benefit plans?
Cassidy: The big criticism right now of health savings accounts is that they don’t work well for lower income people. If you think about it, lower income people are the ones who need the most help purchasing insurance.
We think with a Roth-type HSA that the lower income person is now encouraged to put money up. If the employer puts money into their account, it is not taxed because they have no income tax liability. The big criticism of HSAs is that they disproportionately benefit the wealthier. We address that using this type of Roth HSA.
Clearly, we patterned it after a Roth IRA, which is an incredibly popular vehicle for people to save for their retirement. We think the ability of the money contributed to grow tax-free will be a tremendous attraction to those who wish to plan for their health future.
EBA: As an M.D., you’ve worked with the uninsured in the LSU healthcare system for more than 25 years, so you understand their healthcare needs. Do you worry about the possibility of repealing the ACA before a replacement is in place, and how that could affect those who will lose coverage?
Cassidy: Absolutely and that is why I have always said repeal and replace must be in common. It must be at same time. As we repeal, we simultaneously replace. Sometimes you replace by what you choose not to repeal. President Trump has said he wants the provision that allows children to stay on their parents policy until age 26 to continue. If that is the case, then you don’t repeal it and it inherently is part of your replace. They need to be hand in glove as we go forward.
EBA: There have been more than a half dozen GOP plans proposing an ACA replacement. How do you reach a consensus on changing the ACA going forward?
Cassidy: One thing that is occurring is that everybody is becoming more aware of the issue, and that is your process toward consensus. It’s a complicated topic, we both know that. Folks who have not been on a committee of jurisdiction or perhaps have been absorbed with other issues, this is their opportunity to develop a knowledge base and make the right decision.
No. 2, President Trump has said his goals are that everyone be insured, that those with pre-existing conditions be cared for, that there be no mandates and that you lower the healthcare cost curve. There is only way to get there that I can figure out and those are the provisions of the Patient Freedom Act. If we decide that President Trump’s goals ae not important, then we can do all sorts of things. But if we really think what Trump said is the direction we should be going in, then I really think the only way to get there are the guidelines in the Patient Freedom Act.
EBA: You are speaking at the National Association of Health Underwriter’s Capitol Conference in a couple of weeks, and have a relationship with Louisiana-based Health Agents for America. What are you hearing from broker organizations as top concerns?
As brokers point out, the only area that truly has been functioning well is the employer-sponsored insurance market. Brokers are concerned that this [success be] recognized and not tampered with. The employers have done a better job than any government agency, so I recognize that and will continue to support it.
EBA: You have taken up the cause of brokers. What message do you have for them and what do you hear when you talk with your colleagues on Capitol Hill?
Cassidy: What I would say to brokers it that they have a unique set of insights and unique knowledge regarding the health insurance system. We, as Americans, need brokers to engage with their Representatives and Senators to say that the small-group market and the employer-sponsored market is the one market working reasonably well. That there still needs to be some relief from the rules and regulations of the ACA and that taking away the tax-preferred status of employer-sponsored insurance is probably the wrong direction to go.
Lastly, if they want to look at our Patient Freedom Act, I’d ask them to support the Act. When I speak to brokers, they truly want everybody to get covered, they truly want to get rid of mandates, and they truly want to care for those with pre-existing conditions, but at a lower cost. The Patient Freedom Act gets there. I would ask them to advocate for it.