Leaders for the health insurance industry, state insurance commissioners and brokers warned Wednesday that more health plans almost certainly will defect from Affordable Care Act marketplaces unless Congress and the Trump administration provide some concrete assurances within the next two months.
Unless the government promises to continue subsidies and other features of the law for at least another year, some states probably will not have any insurers selling health plans to individuals buying coverage on their own for 2018, the witnesses warned at a Senate hearing.
“I think we would lose more insurance companies,” said Marilyn Tavenner, president of America’s Health Insurance Plans, the industry’s largest trade group. Insurers that remained, she predicted, would hike prices by perhaps 20 percent.
The testimony before the Senate Committee on Health, Education, Labor and Pensions came as lawmakers sought advice on what Congress and the new administration should do in the short term to prevent the individual insurance market from collapsing, even as they work to abolish the health-care law that has extended coverage to an estimated 20 million people.
Yet the Republican majority’s uncertainty over how to proceed was on display Wednesday morning. While the committee’s chairman, Sen. Lamar Alexander (R-Tenn.), was discussing how to preserve that market, the Finance Committee’s chairman, Sen. Orrin G. Hatch (R-Utah), was espousing a different view.
In a speech before the U.S. Chamber of Commerce, Hatch said Congress should eliminate immediately the taxes created by the 2010 law. Some of those taxes, however, cover the cost of the insurance subsidies that 85 percent of people with ACA health plans receive.
“All the Obamacare taxes need to go as part of the repeal process,” said Hatch, who also reiterated his contention that Congress should rescind the law right away and then design a replacement plan.
At the hearing, Alexander contradicted him. “No one is talking about repealing anything until there is a concrete alternative in its place,” he said.
Alexander also signaled that he might be receptive to taking a smaller first step than President Trump and many Republicans favor. “Is it possible to work just on the individual market?” he asked, referring to the ACA marketplaces intended for people without access to affordable health benefits through a job. He suggested that Congress might “leave for a separate discussion” the idea of transforming Medicaid and Medicare so that they are no longer entitlement programs.
The hearing came hours after a midnight deadline for consumers to get health plans through ACA marketplaces for 2017. It may have been the final such open-enrollment period, depending on what the president and Congress do from here.
Tavenner and Janet Trautwein, chief executive of the trade group representing health insurance brokers and agents, emphasized that health plans must decide in the next few months whether they will participate in ACA marketplaces for 2018. After several major insurers dropped out of the program for 2017, both predicted that more might follow suit unless they have enough confidence in the government’s policies to set realistic prices for next year.
In particular, Tavenner said, insurers need for the premium subsidies to continue, although she suggested that they be reconfigured to give more money to healthy young adults as an incentive to sign up. She also said the government should continue a second form of subsidy, known as cost-sharing reductions, that now benefit nearly 6 million lower-income ACA customers.
The White House could bring a quick end to these cost-sharing subsidies if it were to halt the appeal of an unusual federal lawsuit over them that House Republicans brought.
Sen. Elizabeth Warren (D-Mass.) quizzed Tavenner on whether health insurers have learned any specifics about how the White House intends to carry out an executive order that Trump signed the night of his inauguration calling for ACA rules to be waived or deferred.
To each question, Tavenner replied that the White House had conveyed no details. Insurers need predictability to keep selling individual policies and set realistic prices, she said. “We need long-term predictability.”