Premiums will skyrocket. Insurers will drop out. Americans will lose their coverage.
This is what could happen if the Senate passes a so-called “skinny repeal” plan that jettisons the individual mandate without also instituting policies that stabilize the market, warns one of the nation’s leading insurance industry groups.
“Policies that do not stabilize the market and simply drop incentives for people to buy coverage will repeat what we have seen in the past: premiums will rise rapidly, few or no affordable coverage options will be available and more people will be uninsured,” Marilyn Tavenner, CEO of America’s Health Insurance Plans, wrote to Senate Majority Leader Mitch McConnell and Minority Leader Chuck Schumer on Thursday.
AHIP joined the Blue Cross Blue Shield Association in voicing serious concerns with the GOP’s idea to repeal the individual mandate, which requires nearly all Americans to have health insurance or face a penalty. A provision like the individual mandate is critical to the market’s stability because it brings in young and healthy people, who might otherwise remain uninsured until they need medical care. Their premiums help offset the higher costs of the sick.
Senate Republicans are drafting a slimmed-down version of their bill to dismantle Obamacare as a way to keep the repeal effort alive. The chamber’s leaders have yet to release the text, but a central provision of the “skinny repeal” proposal is expected to be repealing the mandate, one of the least popular parts of the law.
The skinny proposal likely does not include any replacement ideas — lawmakers would have to hammer out a final proposal with the House in conference committee.
The bill the House passed in May would allow insurers to levy a 30% surcharge on those who let their coverage lapsebut then seek to sign up for new policies. States could also obtain waivers to let insurers charge enrollees based on their health history if they were uninsured.
The Senate, meanwhile, had included a provision in an earlier repeal and replace bill that would institute a six-month waiting period for those who sign up for coverage after being uninsured. But the chamber’s parliamentarian advised last week that the waiting period doesn’t comply with the Senate rules for passing the bill with a simple majority.
Insurers say any legislation must contain sticks that incentivizepeople to remain insured. This is especially important if Congress retains Obamacare regulations that prevent insurers from rejecting consumers or charging them more based on their medical histories.
“If there is no longer a requirement for everyone to purchase coverage, it is critical that any legislation include strong incentives for people to obtain health insurance and keep it year-round,” the Blue Cross Blue Shield Association said in a statement Wednesday. “A system that allows people to purchase coverage only when they need it drives up costs for everyone.”
Insurers reminded lawmakers of what else it will take for them to stay in the market. They want a guarantee that Obamacare’s cost-sharing subsidies will be paid, andthey would like the health insurance tax eliminated.
Carriers also pointed out that they only have until mid-August before they have to finalize their 2018 premiums. Many have asked for large rate increases because of the uncertainty emanating out of Washington D.C.
Insurers are not the only ones who are concerned about the Senate’s “skinny repeal” plan. The American Medical Association, the American Academy of Actuaries and othershave said it could wreak havoc in the individual insurance market.