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Congress must stabilize health insurance market

Wed., Aug. 16, 2017

Call it the uncertainty tax.

An analysis of the individual health insurance market shows that the ambiguity following Congress’ failed attempt to adopt a health care plan combined with the Trump administration’s plans to undermine the current law would push premiums upward.

That’s the conclusion of the Kaiser Family Foundation after its researchers sifted through insurance company filings that propose double digit increases in many areas for 2018.

On Tuesday, the Congressional Budget Office delivered more bad news. If the Trump administration stops cost-sharing reduction payments (CSRs) for private insurers, it would mean an average premium increase of 20 percent and the federal deficit would grow by $194 billion over 10 years.

This uncertainty is also raising the anxiety of consumers, who face a Nov. 1 deadline to enroll in plans for 2018.

It’s an unhealthy situation all the way around.

The Kaiser analysis found that many insurers are assuming the Trump administration won’t be a good-faith caretaker for the Affordable Care Act, and who can blame them. The president repeatedly calls it “a disaster” and claims it is “collapsing.” Because of that, many insurers assume the administration will stop subsidy payments and end enforcement of the mandate to purchase. Both moves would push raises higher.

By comparison, the cost of employer-sponsored coverage, which lies outside the turmoil of health care politics, is expected to rise around 5 or 6 percent next year.

Uncertainty is a constant in setting insurance rates, but the Kaiser study called the current situation “far outside the norm.”

Congress should step in to stop this self-inflicted wound, and there’s a chance this could occur.

Sen. Lamar Alexander, chairman of the Senate Health, Education, Labor and Pensions Committee Chairman, is reportedly working on a bill to help stabilize the individual insurance markets. He and Sen. Patty Murray, the ranking Democrat on the committee, are planning hearings.

Under the ACA, subsidies would rise along with premium increases, so lower-income households would be shielded. But those who don’t qualify for subsidies would be hit hard by a stubborn refusal to “put out the fire,” as Alexander put it.

Insurance companies must finalize their 2018 plans by late September. The proposed bill would continue CSR payments to insurers for at least another year. This would help stabilize insurance markets and keep premiums lower.

Despite the president’s protestations, there is very little chance that Congress can repeal and replace the ACA anytime soon. Besides, the plans that went by the wayside were inadequate. They certainly didn’t meet the president’s campaign promise of universal coverage. His administration has offered no specific replacement plan.

The reality is that the ACA will remain the law for the foreseeable future, so the responsible course is for Congress to stabilize the individual insurance market and stamp out the uncertainty tax.