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What's Next for Health Insurance in America?

by Precise Leads

August 3, 2017

Although the latest version of healthcare reform was defeated in the Senate, the debate continues to rage.

The recent defeat of the GOP-sponsored “skinny repeal” of the Affordable Care Act may not signal the end of the healthcare reform debate. After the Senate failed to pass the latest version of ACA reform, President Trump urged Republican senators to continue working on the issue, proposing to withhold federal payments that enable low-income Americans to afford deductibles and copays in an effort to prompt them to action.

Amounting to $7 billion annually, these insurance subsidies help three of every five exchange enrollees. Whether they were properly appropriated by Congress has been the subject of a lawsuit by House Republicans. Although a federal district court judge agreed with the House Republicans, the case is currently on hold in a U.S. Appeals Court in Washington, D.C.

Insurers Face Uncertainty

Uncertainty over subsidies comes as ACA exchange insurers submit estimated rates for 2018 enrollment, which begins November 1. So as to be prepared for each scenario, insurers are calculating rates for a marketplace with and without the subsidies, Leerink analyst Ana Gupte told the AP. A survey of several states conducted by her firm revealed that premiums would increase by 36% without subsidies and by 18% with them.

If President Trump directs the federal government to halt the subsidies, insurers could file a lawsuit in the U.S. Court of Federal Claims and force the government to resume them, one legal expert explained. “The ACA promised to make these payments — that could not be clearer — and Congress has done nothing to limit that promise,” University of Michigan Law Professor Nicholas Bagley told Yahoo News.

Faced with continued questions about the future of the individual ACA marketplace, insurers may leave the state exchanges, a move that several major insurers have already undertaken. Anthem, for example, has exited markets in Ohio, Wisconsin, and Indiana, and its CEO Joseph Swedish said the insurer was contemplating withdrawing from more exchanges if a decision on the subsidies isn’t made “quickly,” according to the AP.

If other insurers follow Anthem’s lead, a rising number of ACA enrollees could soon be left with a single exchange provider, if not none at all. Of the 3,000 counties participating on HealthCare.gov, about a third offer coverage from only one insurer. Next year, roughly 40 counties will have no insurance option available.

A Bipartisan Solution?

Following the defeat of the “skinny repeal”, a bipartisan group of representatives formed a coalition to discuss stabilizing the ACA. Proposals drafted by the 40-member Problem Solvers Caucus include continuing the cost-sharing subsidies, establishing a fund to help states reduce premiums and limit insurer losses, raising the threshold for companies subject to the employee mandate from 50 to 500 employees, repealing the 2.3% sales tax on medical devices, and allowing health insurance sales across state lines.

Senators from both sides of the aisle, meanwhile, have forwarded their own reform plans. Republican Sens. Bill Cassidy of Louisiana, Lindsey Graham of South Carolina, and Dean Heller of Nevada have proposed dispersing $110 billion — the amount they estimate the ACA spends yearly for health insurance — for state-run healthcare programs. Democratic Sens. Tim Kaine of Virginia and Tom Carper of Delaware have suggested a provision that would allow the federal government to subsidize larger than expected claims for policies purchased on the state and federal exchanges. Sen. Lamar Alexander (R-TN) announced this week that the Senate’s Health Committee will hold hearings on healthcare reform.

Whether any of those proposals advances to a vote on Capitol Hill is uncertain. A spokesperson for House Speaker Paul Ryan told CBSNews that the Republican congressman remains committed to completely repealing and replacing the ACA.

For insurance agents advising clients and prospects on health insurance, the only certainty is that the debate over healthcare reform will continue. For now, insurance agents should monitor legislative movements on the federal and state level for any significant changes that could impact their clients, such as insurers abandoning the exchange marketplace in their state for clients covered through the ACA. As always, however, agents must ensure that their clients have the proper medical coverage — now and in the foreseeable future.

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