The health insurance industry’s most influential trade group sent Congress a blistering letter Thursday warning that the so-called “skinny” health care bill Senate Republicans are putting together could wreak havoc on insurance markets ― and do so almost immediately.
The main idea of this new GOP proposal, which is not yet public and indeed may not even exist as anything more than a set of concepts under discussion, is to repeal the Affordable Care Act’s individual mandate ― the financial penalty for people who decline to get health insurance.
GOP leaders have said that by focusing on the mandate and avoiding other divisive issues, such as cuts to Medicaid, they can pull together the 50 votes they would need to pass a bill ― something they are desperate to do, having spent seven years promising to repeal “Obamacare.”
But the proposal would also leave in place the guarantee of coverage for people with pre-existing conditions, among other regulations. Without some incentive for healthy people to sign up for coverage, more of them would, presumably, opt not to buy plans ― leaving insurers with groups of beneficiaries who, on the whole, would have serious medical needs and generate substantial medical bills. Insurers would then likely respond by raising premiums, discouraging yet more healthy people from enrolling.
In Thursday’s letter, America’s Health Insurance Plans predicted that the GOP bill would have this effect: “Eliminating the individual coverage requirement by itself will likely result in fewer people covered and a deterioration of the risk pool, which will increase premiums.”
The warning comes less than a day after the Congressional Budget Office issued a preliminary analysis, commissioned by Democrats, of a proposal that looks like what Republican leaders are discussing.
The CBO concluded that under such a plan, premiums on the whole would rise by 20 percent and the number of people with insurance would decline by 16 million ― in some cases because they would no longer be able to afford the price.
GOP leaders have suggested that the real purpose of passing their bill is simply to move the process forward ― that, after Senate actions, leaders from the two chambers would hammer out a new, broader compromise. But there is no guarantee that GOP members would reach such a consensus, and no clear idea of what it would look like. Already, some have speculated the best move might be for the House simply to pass the narrower Senate bill and send it to President Donald Trump for signing.
Timing is also an issue, as AHIP points out. Insurers have only a few weeks left to alter the 2018 premium requests they have filed with regulators, and they are already nervous about the law’s immediate future ― in particular, the question of whether the Trump administration plans to continue making special payments, called cost-sharing reductions, that subsidize insurers in exchange for making more generous policies available to low-income consumers.
“The mid-August deadline for finalizing 2018 premiums is rapidly approaching, yet significant uncertainties remain,” AHIP’s letter notes. “This continued uncertainty ― combined with targeted proposals that would eliminate key elements of current law without new stabilizing solutions ― will not solve the problems in the individual market, and in fact will result in higher premiums, fewer choices for consumers, and fewer people covered next year.”
Compared to other groups representing patients, consumers and the health care industry, insures have offered relatively mild criticism of GOP efforts to date. And in this latest letter, AHIP acknowledges big problems with insurance markets today and reiterates its support for reforms that would truly make coverage more affordable while still protecting people with pre-existing conditions.
But AHIP also makes clear that it would “oppose an approach that eliminates the individual requirement, does not offer alternative continuous coverage provisions, and does not include measures to immediately stabilize the individual market.”
On Wednesday, the Blue Cross Blue Shield Association, which represents the plans that dominate in the Affordable Care Act exchanges, issued its own, less emphatic letter warning that “a system that allows people to purchase coverage only when they need it drives up costs for everyone.”