The exclusion of measures to stabilize the health insurance marketplace from the omnibus spending package passed last week by the US Congress has revived concerns about sharp premium increases next year in both the individual and group health insurance markets.
A bipartisan plan had been in the works to add such measures to the spending bill, including four years of funding for the cost-sharing reduction (CSR) subsidies prescribed in the Affordable Care Act, billions of dollars in reinsurance funding to help insurance plans cover high-cost patients, and a provision opening up low-cost, catastrophic insurance plans to buyers over 30, Vox health care analyst Sarah Kliff explained last week. Negotiations broke down, however, after Democrats balked at Republicans’ insistence on including these limited-coverage plans in the legislation and reintroducing a ban on providing reinsurance funds to any insurance policy that covers abortion.
As a result, Jeri Clausing reports at Employee Benefit News, benefits experts and employers are now expecting premium hikes of as much as 30 percent in 2019. While the policies in question mainly concern the individual insurance market, the resulting cost issues stand to affect employer-sponsored health coverage as well:
“Destabilization increases uncompensated care, resulting in cost-shifting from healthcare providers to large employer payers,” Ilyse Schuman, senior vice president of health policy for the American Benefits Council, said earlier this month. …
Failure to include that stabilization package will hit employers hard, experts say. With insurance companies about to begin filing their premium rates for 2019, industry groups said in a letter to Congressional leaders last week that “without Congressional action now, the plans offered to Americans will be nearly 30% more expensive than they would be otherwise.”
The stabilization measures Congress failed to enact last week were necessitated by policy actions taken by President Donald Trump and Congress late last year that undercut some of the key provisions of the ACA, which both Trump and Congressional Republicans have expressed an intention to undo. Last October, Trump issued a series of executive orders, one directing the administration to study ways to ease restrictions on association health plans, health reimbursement arrangements, and short-term insurance policies that don’t have to follow the ACA’s strict coverage requirements. The other, more directly consequential of these orders, immediately ended the CSR subsidies provided to insurers, which experts said would force insurers to either raise rates for consumers or back out of their federal contracts to sell health plans in the coming year.
In December, as part of its major tax reform bill, Congress zeroed out the tax penalty levied on Americans who fail to obtain health insurance coverage, effectively ending the ACA’s controversial individual mandate. The canceling of these penalties is also expected to drive up premiums by encouraging healthy individuals to exit the insurance market. Again, while this policy concerns the individual market only, group health insurance buyers (i.e., employers) also stand to take a hit from an increase in premiums.