December 14, 2019
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Uncertainty, not the Affordable Care Act, is driving up insurance rates

JOSHUA ROBERTS | REUTERS
JOSHUA ROBERTS | REUTERS
Speaker of the House Paul Ryan, R-Wisconsin, speaks about the American Health Care Act, the Republican replacement to Obamacare, at the Republican National Committee in Washington, U.S., March 8, 2017.

Republicans, including President Donald Trump, are working overtime to kill the Affordable Care Act. Not just in Congress but also in the real world, where insurance companies are raising rates and slowly leaving the ACA. They aren’t raising rates or abandoning the ACA because it is unworkable or “a disaster,” as the president calls it.

They are doing so because there is too much uncertainty surrounding the health insurance market right now. Call it death of a 1,000 details negotiated in secret.

To be sure, there are problems with the Affordable Care Act. For example, too many healthy people decided it was better to pay the penalty rather than buy health insurance, leaving the individual market unbalanced with too many sick and older people, who have more insurance claims.

This reality already caused premiums to rise in many markets and insurance carriers have left other unprofitable markets.

Rather than fix the problems in the Affordable Care Act, which critics call Obamacare, Trump and Republican leaders in Congress have worked for months to repeal it and replace it with a plan that will price millions of Americans out of the health insurance market.

A bill passed by House Republicans will leave 23 million more Americans without health insurance by 2026 than if Affordable Care Act stays in place. It also would raise costs for lower income older Americans by as much as 800 percent, according to an analysis by the Congressional Budget Office.

A Senate bill is being negotiated in secret, raising concerns that it is no better than the House Republican bill. This has prompted Democrats to try to stall work in the Senate to delay action on the health insurance bill. Several Republican senators, including Susan Collins, have expressed concern over the secrecy, but they have not been successful in changing their leadership’s handling of the bill.

Meanwhile, insurance companies need to set prices and policies for next year. If the Affordable Care Act is significantly changed, rates could rise by more than a third, the Pennsylvania insurance commissioner warned recently.

“Information provided by insurers shows the extent to which instability and changes would impact Pennsylvania’s 2018 health insurance rates. This proves what we already know — instability caused by adverse action from the federal government will do nothing but hurt consumers who are stuck in the middle,” Commissioner Teresa Miller said in a June 1 news release.

If the individual mandate is repealed, Pennsylvania insurers expect to raise rates by an average of 23 percent in the individual market, she said. If cost-sharing payments to insurers are also stopped, the rate increases would be more than 36 percent, on average. These cost-sharing payments allow companies to offer low-income enrollees lower deductibles and copayments. The House Republicans have fought these subsidies in court and their future remains uncertain.

Miller and other insurance commissioners cite the uncertainty surrounding the Affordable Care Act — not the law itself — as the reason for these large increases.

“The uncertainty is extremely problematic,” Eric A. Cioppa, the superintendent of the Maine Bureau of Insurance, told The New York Times. He said insurance companies could not fix their rates without knowing the fate of the cost-sharing subsidies. “If they don’t get a subsidy, I fully expect double-digit increases for three carriers on the exchanges here.”

All three companies that participate in the Affordable Care Act in Maine have asked for significant rate increases for next year.

Harvard Pilgrim is seeking the largest increase — nearly 40 percent, on average. Anthem Health Plans of Maine and Community Health Options have asked to raise rates by about 20 percent. In its filing, Anthem noted the uncertainty about the future of subsidies included in the Affordable Care Act. Without them, the company might need to raise rates further, stop selling certain plans, or even stop selling Affordable Care Act plans in some areas altogether, it said.

The answer to this problem is not to weaken the important consumer protections in the Affordable Care Act or to further raise costs for skimpier health insurance policies for average Americans, while giving tax breaks that have nothing to do with health care to the wealthy.

The solution, long ignored by Republican leaders in Congress, is to stop bad mouthing the Affordable Care Act and to actually fix its flaws rather than toss it aside.

 



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