October 26, 2017

The Honorable Orrin Hatch
Chairman, Committee on Finance
United States Senate
Washington, D.C. 20510

The Honorable Kevin Brady
Chairman, Committee on Ways and Means
United States House of Representatives
Washington, D.C. 20515

Dear Chairman Hatch and Chairman Brady:

On behalf of enrollees that receive coverage on the Marketplace and the insurance organizations that provide that coverage, the Association of Community Affiliated Plans (ACAP) is writing to express our concern regarding your bicameral agreement on improving the Marketplace.

ACAP represents not-for-profit Safety Net Health Plans. Collectively, ACAP plans serve more than 21 million enrollees in Medicaid, Medicare, and the Marketplaces, including over 700,000 enrolled in the Marketplace for 2017.

We appreciate your commitment to stabilizing the Marketplace by funding cost-sharing reduction (CSR) payments through 2019. However, we are concerned that your agreement repeals the individual mandate and does not include an alternative incentive for people to maintain continuous coverage. Without such an incentive, we fear an increase in adverse selection, where consumers wait until they become sick to purchase coverage.

Earlier this year, ACAP contracted with the actuarial firm Wakely Consulting Group to evaluate the effectiveness of alternatives to the individual mandate. These alternatives included increasing mandate penalties, a late sign-up penalty, escalating penalties, underwriting, a waiting-period, auto-enrollment, increased outreach, and increased subsidies. This study showed that to date, there is no alternative as effective as the individual mandate in ensuring a stable Marketplace that costs the government less. Additionally, the study highlighted that only a combination of policies could produce similar risk pool effects as the current mandate.

ACAP is concerned that in a world of guaranteed issue, repealing the individual mandate without incorporating proposals for incentivizing continuous coverage could destabilize the Marketplace and result in increased premiums and eventual death spiral.

We urge you to continue to enforce the current mandate or institute another equally effective combination of policies. We remain committed to ensuring access to affordable coverage for all Americans and working with you to ensure the stability of the Marketplace.



Margaret A Murray, CEO
Association for Community Affiliated Plans