JOHN DICKERSON: There is one critique of that, though, that your legislation helped the condition before this tax bill, which has removal of that individual mandate, and that basically these fixes won’t be enough for those people who will see higher premium increases.COLLINS: We have a brand-new study that just came out last week by Avalere, a respected consulting firm, that says it will more than offset the repeal of the individual mandate. And keep in mind that the individual mandate fines fall disproportionately on low- and middle-income families. Eighty percent of those fines are paid by families who make less than $50,000 a year.
As part of the debate over tax reform, Congress is discussing a proposal put forth by Senator Collins that would provide 2 years of reinsurance funding at $5B per year. Avalere estimates that level of reinsurance would reduce 2019 premiums by 4% and increase enrollment by 180,000 people (Table 1). According to Avalere, reinsurance helps protect insurers from high cost claims and, as a result, lowers premiums.In addition to the reinsurance funding, Congress may vote on the legislation previously proposed by Senators Alexander and Murray, which would fund the CSRs. In combination, CSR funding and $5B in annual reinsurance could lower 2019 premiums by 18% and increase enrollment by 1.3M people.
The Alexander-Murray bill would reverse only the premium increases resulting from the Administration’s decision not to pay CSRs, and only for 2019. In contrast, repealing the individual mandate would increase premiums in 2019 and beyond, and for all individual market plans, not just silver plans. Without the individual mandate, fewer healthy people would sign up for individual market coverage, increasing average costs. CBO estimates this would raise premiums by about 10 percent, while some major insurers have said they would have to raise premiums across the board by about 15 percent if the individual mandate were repealed or no longer enforced. The premium increase would wipe out much of the 2019 silver plan premium reduction from passing the Alexander-Murray bill, while the Alexander-Murray bill would address none of the premium increases for other plans or in other years.