When Americans are asked what issue is most important to them, healthcare continues to top the charts. The 116th Congress is dominated by lawmakers who pledged last fall to make healthcare more affordable.
Late last month, Rep. Angie Craig (D-Minn.) introduced the State Health Care Premium Reduction Act to lower health insurance premiums in the individual market. Craig has said she supports stabilizing the individual marketplace with bipartisan ideas such as a federal reinsurance program. In fact, the House Energy and Commerce Committee has set a hearing on a federal reinsurance program this week.
Such a comprehensive approach to stabilize the individual market would go a long way toward delivering on the campaign promises of 2018. The individual market offers peace of mind to millions of hardworking Americans and their families who don't have access to affordable, high-quality coverage and care through employers or public programs. Reinsurance is a realistic, concrete place to start that has the benefit of broad bipartisan support in both houses of Congress, most notably including Sens. Lamar Alexander (R-Tenn.) and Susan Collins (R-Maine), and Reps. Frank Pallone (D-N.J.) and Greg Walden (R-Ore.).
A federal reinsurance program can help ensure a stable market through a tested approach that protects consumers from significant premium increases and helps health plans manage catastrophic claims. Reinsurance is a financial safety net, put in place to shield plans and patients when something goes terribly wrong. Congress has included this type of reinsurance protection in the Medicare Part D drug benefit, and at least eight states will have reinsurance programs by the end of 2019.
Data from the state efforts demonstrate the effectiveness of reinsurance in making healthcare more affordable for consumers. In Oregon, premiums were 6% lower than they would have been without the state reinsurance program. In Wisconsin, Health Insurance Commissioner Ted Nickel projects insurance premiums will decline by an average of 3.5% in 2019—11% lower than they would be without reinsurance.
In Craig's own state of Minnesota, the reinsurance program lowered premiums by an average of 20%, while health plans HealthPartners and UCare have both experienced increases in individual market enrollment, at a time when many states saw losses. Reinsurance has triggered a virtuous cycle in these early state adopters; as premiums fall, more people enroll; as more people enroll (especially healthier Americans), the risk pool improves, stabilizing costs.
While federal reinsurance stands out for its ability to strengthen the market, a comprehensive package is what's needed to provide the certainty both health plans and consumers desperately need. This package must include re-establishing funding for navigator programs to provide outreach, education and enrollment assistance to consumers; strengthening the risk pool through proven strategies such as automatic enrollment and continuous coverage; appropriating money for cost-sharing reduction subsidies to help lower-income individuals obtain affordable coverage; and requiring government tracking of short-term, limited duration insurance plans to assess the impact on the market as a whole.
Why the urgency for such legislation? Because health plans need clarity on the rules of the road in order to set accurate and affordable rates. As we've seen in years past, pricing for uncertainty has cost consumers dearly. We'd all be better off if health plans could focus on what they do best, coordinating the care and managing the risk of the people in their communities, not having to scramble every time the winds change in Washington.
With more than 100 new members in Congress this year, the energy on Capitol Hill is palpable. Before the inside-the-Beltway inertia sets in, we hope more members will join Reps. Craig, Pallone and Walden, and Sens. Alexander and Collins, to deliver on the promise of making healthcare more affordable by passing a bipartisan stabilization package this spring.
