For months, Congressional Republican leaders and many of their rank-and-file members engaged in a purely partisan effort that, if it were successful, would have had catastrophic effects on Coloradans, their communities and the state economy. Hundreds of thousands of Coloradans would have lost health care coverage and those lucky enough to retain their coverage would have seen their premiums sky-rocket. Such proposed policies represented the opposite of what was needed to make health care coverage more accessible, transparent, efficient and affordable.
We have already seen the negative consequences of Congress’ reckless escapades as Colorado’s insurers announced they intend to charge customers 27 percent more on average in premiums next year alone. Premiums rose in part because of the market uncertainty associated with these political games. No one in the industry knew what Congress would do, and thus they couldn’t set rates to protect themselves against potential losses. Additionally, the uncertain fate of Cost Sharing Reduction (CSR) payments, which could result in a $7 billion loss to insurers if the Administration does not honor its commitments, is also proving to be a destabilizing factor.
It doesn’t have to be like this, and going forward we urge Congressional leaders to reject any urge they might have to engage in political theater and brinksmanship because the consequence of their actions have real life implications for Coloradans.
Instead, Congress should listen to the likes of Senators Lisa Murkowski, Susan Collins, John McCain and others and work together in a bipartisan fashion to address our nation’s most pressing health care problems.
Here are five ways Congress can accomplish that goal:
- Fund the Cost Sharing Reductions — CSRs reduce the cost-sharing obligations (such as deductibles, copayments, etc.) for moderate-income individuals who purchase silver-level health insurance plans through the ACA’s health insurance marketplaces. Under the ACA, insurance companies are required to provide CSRs to individuals who qualify. The federal government is required to reimburse those companies for the CSRs they provide. However, in 2016, a federal district court ruled that the administration was improperly funding the CSR program. The resulting uncertainty around whether insurance companies will receive their CSR reimbursements contributes to instability in the market and increases premiums and other insurance costs. Congress can help stabilize insurance markets by properly funding the CSR program.
- Strengthen the individual mandate. The individual mandate is the ACA provision that requires people to carry health insurance for at least nine months out of the year, or pay a fine when they file their taxes. An effective individual mandate is needed to ensure that there are enough young, healthy people participating in insurance pools whose low costs counterbalance the higher costs associated with sicker enrollees. Without an effective individual mandate, risk pools may end up with a high a proportion of costly enrollees, leading insurance companies to raise premiums. Meanwhile, those high costs push healthy enrollees out of the market. This cycle is commonly referred to as the “insurance death spiral.” The Trump administration has already contributed to instability in the insurance market by suggesting that it won’t enforce the individual mandate. By ensuring that the administration enforces the mandate Congress can boost participation in the insurance market, stabilize risk pools and lower premium costs.
- Fix the “family glitch.” The ACA prohibits individuals from receiving federal subsidies for private health insurance plans if their employers offer insurance coverage that is “affordable,” as defined in federal regulations. If employer coverage meets the affordability standard, the employed individual’s family members are not eligible for federal subsidies if the employer covers the individual’s family, even if the family coverage is not affordable. This so-called “family glitch” leaves many people without affordable health insurance options. Congress can improve the affordability of coverage and increase participation in insurance markets if it fixes the family glitch.
- Adequately fund reinsurance. Under the ACA, insurance companies can’t exclude people from coverage based on preexisting conditions. While this was a strong step forward for our health care system as a whole, it means that many people with costly medical conditions entered the individual market, began receiving coverage and drove up costs to insurance companies as a whole. These higher costs had the potential to raise insurance premiums for everyone in the individual market and deter healthier individuals from buying health insurance, creating yet another death spiral. To help defray the additional costs insurance companies would incur as a result of covering higher-risk enrollees, the ACA funded a temporary reinsurance program from 2014-2016. Reinsurance programs can keep premiums on the individual market stabilized for everyone and ought to be reauthorized by Congress. States could also take that on. For example, the Republican-controlled state of Alaska set up a $64 million reinsurance fund to help insurers cover the highest-cost cases. Colorado is considering state-level solutions, like a reinsurance fund, that might help with covering high-cost patients.
- Get a handle on health care costs. Although the ACA has been largely successful in accomplishing its principal task – enrolling tens of millions of Americans in health insurance – we will not get to the core of what ails our health care system until we address underlying costs. Every other developed country in the world delivers health care for a fraction of what it costs in the U.S. They use a wide range of tools and strategies that line up with each country’s values, political realities, and medical traditions. Some set rates for health care encounters. Some negotiate prices for drugs and medical devices at the national level. Some have government administer payments. Some mandate transparency. Some governments own hospitals and pay the doctors who work in them. Others limit new hospital construction and the purchase of new machines. It’s time for Congress to leave behind the notion that cutting government support to families will reduce health care costs and get to work on true solutions to the cost conundrum.
Congressional leaders have asked for ideas on how to address the issues ailing our health care system. Well, here they are. It’s time to turn the page, return to regular order and work together to provide some relief to those who don’t have the luxury of engaging in political theater and partisan nonsense.
-Kristopher Grant and Allison Neswood