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There has been a high level of activity related to healthcare reform during the last two weeks. Despite these efforts, the future of the health insurance market is not any clearer for agents, brokers and their clients. The following is a summary of important developments, including one nugget of good news.
Republican leaders in the House of Representatives stepped away from the topic of healthcare reform in late March following their inability to pass the American Healthcare Act (AHCA). They’ve renewed efforts, with heavy pressure from the President, to find a solution. Certain changes now being considered would reduce standard benefit levels, other changes would give states the flexibility to maintain or modify requirements in the ACA. The notion of state flexibility in particular seems to have universal appeal and may be a concept that finds its way into final legislation in both the House and Senate.
However, the dynamics that led to the AHCA non-vote are still in place: a wide gap between moderate and conservative Republicans about the extent of changes that should be made to the ACA, a total blockade by Democrats on any legislation that modifies key provisions of the ACA and senators are expected to moderate any bill passed by the House.
While house Republicans try to develop compromise legislation, the Centers for Medicare and Medicaid Services (CMS) issued stabilization rules meant to address areas in the ACA that insurers believe contribute to losses. Insurers said this was a step in the right direction, but they uniformly agreed that the administration’s refusal to state whether it would continue cost-sharing reduction payments could lead to significant premium increases or to insurers exiting some or all markets. See our recent article: “A Little-Known Provision in the ACA Could Accelerate Healthcare Reform” to learn how cost-sharing payments could spur more rapid progress on healthcare reform.
A nugget of good news regarding cost-sharing payments emerged this week. On April 26th, the White House told congressional leaders that in the short term, it would continue cost-sharing payments to insurers. This will help the insurance market for now; however, until insurers know that these payments are permanent, there will continue to be a lack of stability.
Two major developments at the state level could impact the insurance market.
On April 27th, Covered California published the results of a study projecting 28 to 49 percent premium increases in 2018, should the federal government discontinue the above-mentioned cost-sharing payments and relax enforcement of the individual mandate. You may recall that the President’s January 20th executive order directed government agencies to minimize financial burdens imposed by the ACA. This could be interpreted to mean that the IRS will relax its imposition of penalties on those who do not purchase coverage. Taken together, the study projects, these two events would lead to significant premium increases and a drop in the number of insured.
A second development with the potential to impact Californians was the April 26th approval, by the Senate Health Committee, of a bill to establish a single-payer healthcare system (see: basics of single-payer for an explanation of the concept). The measure now moves to the Appropriations Committee where its fiscal impact will be assessed and debated prior to consideration by the full Senate. This is not the first attempt to pass “single-payer” legislation in California, as is clearly described by Healthcare for All – California, and this iteration faces significant challenges as others have in the past.
If you would like to learn how “single-payer” could affect your clients and your business, we recommend reviewing these talking points developed by the California Association of Health Underwriters (CAHU), the professional association that represents health insurance agents and brokers and their clients. If you are not yet a member of CAHU and NAHU (the national organization), we strongly recommend that you join (see sponsorship offer below). These organizations provide agents and brokers with excellent professional development opportunities; easy-to-follow instructions on how to get your message to lawmakers and most importantly, they advocate strongly with legislators on your behalf.
To encourage you to join NAHU and CAHU, Claremont will sponsor your membership by paying one month’s dues ($40 value) for the first 15 brokers that contact us. Simply email us at email@example.com to become a member with the Claremont sponsorship.
Contact the small group experts at 800.696.4543 or firstname.lastname@example.org.