Stephanie Armour at the Wall Street Journal reports on the increasing willingness of Republicans to think about reinsurance:
Republicans opposed to the Affordable Care Act are showing interest in proposals to shore up the health law and lower premiums, driven partly by their concerns that any big jump in insurance costs may hurt them in the midterm elections.
State and federal GOP lawmakers are backing or considering reinsurance proposals that aim to curb premiums by offsetting insurers’ costlier claims….
Timing is important. Insurers are developing their preliminary rates right now. They submit those preliminary rates for state approval in mid-spring. Insurers then sign their final contracts with the Center for Medicare and Medicaid Services (CMS) in late September. The public use files that show actual pricing tends to be released between seven and ten days before open enrollment starts. Open Enrollment starts November 1, 2018. Midterm elections are November 6.
Republicans as the party defending more seats and holding the White House will get blame or credit for the general environment. They have a strong incentive to avoid headlines that say “Your insurance is going up 20% again”.
Right now here are the major factors of pricing changes with rough estimates of the size of the increase:
- General medical trend +7
- Repeal of the individual mandate +10
- More association and underwritten individual plans +2 to +5
- Repeal of the Health Insurance Tax -3
We’re looking at a baseline of a seventeen to twenty point increase in individual market, non-subsidized premiums. Premiums will drop as people downshift from Gold to Silver or Silver to Bronze as well as shop around if they are able to do so. But this is a good rough baseline.
A reinsurance program funded at $15 billion dollars in initial federal outlays reduces the increase to probably five to eight percent on average. That is a much better headline.
I think there is a policy deal that can be made that trades a Democratic policy win for Republican political wins. A deal that funds reinsurance, modifies 1332 guidance, shifts outreach from Healthcare.gov to states and makes Catastrophic plans funny looking Bronze plans could easily pass. Cost Sharing Reduction subsidies will not be restored to their 1/19/17 status quo. If CSR is funded, it will be in exchange for richer premium tax credits and higher phase-outs of both premium and CSR subsidies.
Avoiding bad headlines a week before midtermsPost + Comments (9)