A new analysis from consultant Oliver Wyman says that if Congress and the administration take just four steps, they could not only substantially boost health care enrollment, but also cut premiums — all without changing the Affordable Care Act.
NPR reports that the four steps would stabilize the insurance markets and increase enrollment by approximately two million people, all while cutting premiums by more than 20 percent and remaining revenue neutral.
The release of the paper comes only a few days prior to planned hearings by the Senate Health, Education, Labor and Pensions Committee on how to stabilize markets in the short term.
While the analysis finds that approximately 17 million people will be buying coverage on the exchanges next year, with many of them outside the ACA marketplaces, implementing those four actions would result in about 19 million people buying coverage, while reducing the average monthly premium from $486 to $384.
1. Making the cost-sharing reduction payments that the president has said he wants to end.
The payments, which are reimbursement for discounts on copayments and deductibles the companies are required by law to give to low-income customers, were implemented by the Obama administration.
However, fears that the Trump administration will end them — thus increasing insurers’ costs — have gone a long way toward destabilizing the markets as insurers either hike rates or exit markets in an effort to avoid losing money.
2. Creation of a reinsurance program.
While the ACA included a temporary reinsurance program to protect insurance companies from massive losses during the transition to the new market once the law took effect, such a program would help to prevent higher rates caused by high-risk pools being imposed across all customers.
3. Enforcement of the individual mandate.
Trump has openly advocated against this, in fact suggesting that the Internal Revenue Service not take any action to pursue.
While the ACA requires that people who are uninsured and do not buy coverage pay a penalty of $695 or even more, failure to enforce the mandate allows healthy people to simply sit out the market while people with health problems buy coverage; that raises the cost of coverage not just for them, but for all insureds.
4. Elimination of the health insurance tax.
The analysis says that eliminating the tax on insurers that is currently required by the ACA — which helps offset the costs of federal subsidies that assist people buying policies on the ACA markets — would cut premiums by about 3 percent in 2018.
The tax was not charged this year under a moratorium passed by Congress, and if it were eliminated, the analysis says, premiums would fall.
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