Helping health insurers pay high-cost claims will help push down premiums, actuaries told Senate leaders.
But, the American Academy of Actuaries said in a letter to Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Charles Schumer (D-N.Y.), a provision in the Better Care Reconciliation Act (BCRA, H.R. 1628) that would repeal Obamacare’s penalty for not having qualified coverage would put upward pressure on premiums as it would remove incentives for young, healthy people to enroll.
The AAA was appreciative that the Senate bill would appropriate funding to cover cost-sharing reduction (CSR) subsidies through 2019, which cover out-of-pocket costs for low-income people. Without the CSR subsidies, insurers have said they would need premium increases of 20 percent in 2018 just to cover the costs, which they are required to do under the Affordable Care Act.
The BCRA allocates $15 billion in both 2018 and 2019 and $10 billion in both 2020 and 2021 for reinsurance funding for high-cost claims. The money is intended to help stabilize the troubled non-group health insurance market, which is facing sharp premium increases in 2018 after average increases of 25 percent in 2017.
In addition, the Department of Health and Human Services reports that as of July 3 40 counties with at least 27,000 enrollees have no ACA exchange coverage. As many of 2.4 million participants may have only one choice of plans, the HHS says.
A provision in the Senate bill and the House-passed American Health Care Act (H.R. 1628) that would require people to keep continuous coverage or either wait six months to get coverage (under the Senate bill) or pay a 30 percent surcharge for a year (in the House bill) would help protect insurers, AAA senior health fellow Cori Uccello told me.
Under continuous coverage, which is similar to provisions in the Medicare program, if people don’t keep coverage they would be thwarted from waiting until they got sick to sign up, Uccello said. “That helps in a sense the risk pool. But the question is, does it do enough to bring healthy people in sooner, and it really doesn’t do much to meet that goal,” she said.
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