The individual health insurance market has a lot of problems. Soaring premiums and deductibles. Dwindling health plan choices. And a risk-averse industry facing a lot of uncertainty as it stares down the deadline to decide whether to offer Affordable Care Act plans and how much to charge for them.
This morning state insurance commissioners came before the Senate Health, Education, Labor and Pensions committee to talk about ways to solve these and other problems and shore up the healthcare reform law that, for now, remains the law of the land.
Some common themes emerged at the first of four hearings: Continue funding cost-sharing reduction (CSR) payments—and not just for one year. Invest in reinsurance programs and set up high-risk pools. Reverse cuts to navigator programs and funds for marketing the individual exchanges. And give states more freedom to run health insurance programs, with or without federal help.
Lori Wing-Heier: Please continue funding navigator program. It— FierceHealthPayer (@HealthPayer) September 6, 2017
reduces uninsured, maximizes participation.
Congress must act quickly to address these growing uncertainties, said Mike Kreidler, Washington state's insurance commissioner. Collapse “can and will happen” if Congress doesn’t act now. “Lives depend on it,” he said.
Here are some of the stabilization suggestions from Kreidler and other state insurance commissions who testified this morning:
CSR payments: Not giving insurers a guarantee will be like shouting “fire” in a crowded theater, Kreidler said, calling for Congress to “permanently” fund CSR payments. A one-year Band-Aid won’t help—insurers are already planning for 2019.
Reinsurance: In Alaska, said Lori K. Wing-Heier, the state’s insurance director, premiums were up a whopping 203% since 2013. A bipartisan-supported reinsurance program helped turn things around. Prior to enacting it, insurance companies indicated rate filings would be up 40% in 2017. After? The increase averaged 7.3%.
Lori Wing-Heier: In Alaska, premiums up 203% since 2013. Reinsurance program increases enrollment, attracts healthier people, reduces costs.— FierceHealthPayer (@HealthPayer) September 6, 2017
Along with CSR payments, reinsurance should be an immediate priority, said Julie Mix McPeak, commissioner of the Tennessee Department of Commerce and Insurance. Congress can focus on broader fixes after that, including benefit design and the cost of healthcare and health insurance.
Reinsurance or high-risk pools would bring premiums down dramatically. But it’s also expensive to set up ($15 billion by some estimates) and would require federal help in some states.
Alternative group insurance: “The individual market is the worst place to be,” said Sen. Rand Paul, R. Ky., adding it makes no sense to continue supporting individual markets when large-group insurance pools protect patients at lower and more stable rates.
Sen. Lisa Murkowski, R-Alaska, said group insurance could work for residents in underserved counties—perhaps they could buy into the federal or state employees’ benefit programs or other existing group plans. But for all 18,000 people in her state on individual plans? “We cannot construct a market [with] 18,000 people,” she said. “So where could they fit?”
.@lisamurkowski applause line: Letting under-served buy into federal employees’ benefit program. (Or other group alternatives.)— FierceHealthPayer (@HealthPayer) September 6, 2017
Unattractive risk pool population, prohibitions about selling across state lines are barriers to alternative group pools, though.— FierceHealthPayer (@HealthPayer) September 6, 2017
Giving states power ... and some federal help
Another theme that emerged at the hearing—states have unique patient populations and different health insurance needs.
John Doak, Oklahoma’s insurance commissioner, is open to giving states more flexibility to run health insurance programs. Just so long as his state can opt out.
“Obamacare is a failure” in his state, he said, with no meaningful drop in the number of uninsured, the number of insurance carriers down to one in many counties and rates up 135%.
“This cannot be sustained,” he said.
On the other hand, Teresa Miller said the Affordable Care Act is, for the most part, working well in Pennsylvania, where she was insurance commissioner until this year. There are 426,000 people on the individual marketplace and more than half benefit from CSRs, she said. And the average rate increase for 2018 is 8.8%.
“Our individual market is not collapsing,” she said.
Kreidler said Washington state has embraced the Affordable Care Act and the market there is stable. But, he said, he's nervous about what will happen next year if Congress doesn't shore up the individual markets.