A leading health insurance group said Monday there is an “urgent” need for Congress to act to stabilize ObamaCare markets after the repeal of the individual mandate in December.
“There’s an urgent need to stabilize the market,” Justine Handelman, a senior vice president at the Blue Cross Blue Shield Association, told reporters at a briefing.
She said the most important action Congress could take is to provide funding for what is known as reinsurance, which helps cover the costs of especially sick patients, thereby bringing down premiums.
“Without the mandate we think that the single most important thing that can help offset that loss is dedicated funding for reinsurance,” Handelman said.
The group pointed in particular to a bill from Rep. Ryan CostelloRyan Anthony CostellloRep. Brendan Boyle decides against Pennsylvania Senate bid Pennsylvania's Democratic lt. governor files to run for Senate Bottom Line MORE (R-Pa.) in the House to provide reinsurance funding, as well as funding for other ObamaCare payments known as cost-sharing reductions (CSRs).
Momentum has been building in Congress for a stabilization measure, which could be included as part of a long-term government funding deal in the coming weeks. Conservatives object to the idea as a “bailout” of insurers, but many Republicans, including leadership in both chambers, has expressed interest in the idea.
Blue Cross officials said, based on data from the consulting firm Oliver Wyman, they project that if Congress provided $15 billion per year in reinsurance funding, as well as the CSR payments, premiums for silver plans, the most popular type, would be significantly lowered. They project that premiums would be 17 percent lower on net in 2019 than they are in 2018, and 27 percent lower than they otherwise would have been.
“When's the last time you've seen an actual net reduction in rates?” said Kris Haltmeyer, a vice president at the Blue Cross association. “That's the type of outcome you could have with funding reinsurance.”
Officials said funding CSRs and providing reinsurance funding would go a long way to make up for the loss of the individual mandate, which helped get healthier people enrolled to balance out the sick.
Haltmeyer said reinsurance funding would more than make up for the projected 10 percent increase in premiums from Republicans repealing the individual mandate in the tax-reform bill in December.
With that stability funding, Haltmeyer noted the remaining effect of the repeal of the individual mandate would be that less people would have health insurance. Some insurers could also pull out of certain markets, though he said it is not clear that would happen.
“There will be fewer people participating," Haltmeyer said. "It could have an effect in some areas on participation, but we really won't know that until the fall.”