Keeping Continuous Coverage May Not Result in Lower Premiums


The Republican health-care bill could result in higher premiums even for people who keep continuous coverage.

The American Health Care Act (AHCA, H.R. 1628) would replace Obamacare’s unpopular individual mandate requiring most people to buy health insurance or pay a fine. Instead, the AHCA includes a continuous coverage provision, which allows insurers to charge a 30 percent late-enrollment surcharge for 12 months if enrollees had a coverage lapse for longer than 63 days.

“A potential implication of that is actually getting rid of community rating more broadly, even for people who have continuous coverage,” Cori Uccello, a senior health fellow at the American Academy of Actuaries, said at an Alliance for Health Reform briefing I covered.

Healthy people could potentially buy cheaper insurance that issuers discounted for healthy people, leaving less healthy people in the continuous coverage risk pool, Uccello said.

The AHCA also would allow states to waive Affordable Care Act insurance market reforms, including so-called community rating requirements that insurers cover people with pre-existing conditions without charging higher premiums, if the states covered high-cost individuals in some way, such as through high-risk pools.

Insurers are likely to lobby their state legislatures for the waivers, Karen Pollitz, a senior fellow at the Kaiser Family Foundation, said. Insurers have called for a strong mandate requiring people to buy coverage in order to provide community rating, or many healthy people wouldn’t buy coverage, she said.

However, the individual mandate hasn’t functioned well. In 2014, 8 million Americans paid the penalty and another 12 million were exempt from it, according to the Internal Revenue Service. Many of them were young adults, who insurers have wanted to get into the ACA exchanges to lower overall claims and premium costs.

The AHCA was passed May 4 in the House of Representatives by a 217-213 vote with no Democratic support and 20 Republicans in opposition.

Read my full article here.

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