Will Congress Try to Rein in Obamacare Premiums?

Experts see several options for boosting enrollment and curbing premium spikes, but they’re all politically difficult.

AP Photo/Jon Elswick
Oct. 27, 2016, 8 p.m.

Nobody’s happy about the av­er­age 25 per­cent in­crease in Obama­care premi­ums—but don’t ex­pect it to change.

Health policy ex­perts say it’s too late for Con­gress or the ad­min­is­tra­tion to try to min­im­ize premi­um hikes for next year. There’s only a brief win­dow even to af­fect 2018 premi­ums, and that would re­quire the polit­ic­al will to make mean­ing­ful changes to Obama­care in the first few months of a new ad­min­is­tra­tion.

“It is what is; 2017 is ba­sic­ally now out the door, and it is hard to fathom any­thing to change it either le­gis­lat­ively or reg­u­lat­or­ily. … Once you start a plan year it’s really hard to tell plans to do something dif­fer­ent,” said Rod­ney Whit­lock, vice pres­id­ent of health policy at ML Strategies and a former health aide to Re­pub­lic­an Sen. Chuck Grass­ley.

The Obama ad­min­is­tra­tion said Monday that premi­ums for a middle-of-the-road Obama­care policy—the group of plans used to cal­cu­late premi­um sub­sidies—would in­crease by an av­er­age of 25 per­cent next year. Even so, the ad­min­is­tra­tion said, 72 per­cent of cur­rent mar­ket­place en­rollees can find a plan for $75 or less per month after sub­sidies, though many con­sumers would need to re­turn to the ex­changes and shop for a new plan in or­der to max­im­ize their sub­sidies.

In the wake of the an­nounce­ment, White House press sec­ret­ary Josh Earn­est re-touted some Obama-backed solu­tions—such as ex­pan­ded tax cred­its to young people—and called on Re­pub­lic­ans to come to the table to dis­cuss ideas.

Some ex­perts sug­ges­ted that the sharp in­crease was the res­ult of in­surers un­der­pri­cing their policies when they first entered the new mar­ket­places, and end­ing up with sick­er, more ex­pens­ive cus­tom­ers than they had ex­pec­ted.

Policy ex­perts say law­makers do have tools avail­able to boost en­roll­ment or curb fu­ture premi­um in­creases—but most of those op­tions would in­volve ex­pand­ing some of the law’s most un­pop­u­lar or most ex­pens­ive pro­vi­sions.

“The core prob­lem is out­side of the lower-in­come pop­u­la­tion that qual­i­fies for ex­tra help, there’s a sig­ni­fic­ant is­sue of health­i­er people not sign­ing up, and that I think is go­ing to re­quire some le­gis­lat­ive changes in the way the be­ne­fits and the sub­sidies and the pay­ment to plans are de­signed. And there has been de­bate around wheth­er that’s feas­ible or not,” said Mark Mc­Cle­l­lan, dir­ect­or of Duke Uni­versity’s Mar­gol­is Cen­ter for Health Policy and a former ad­min­is­trat­or of the Cen­ters for Medi­care and Medi­caid Ser­vices and com­mis­sion­er of the Food and Drug Ad­min­is­tra­tion.

In the same vein, Whit­lock sug­ges­ted look­ing at the in­di­vidu­al man­date, the pen­alty for not hav­ing health in­sur­ance, say­ing it is not driv­ing enough young­er people to buy plans.

Earn­est said Pres­id­ent Obama’s idea to of­fer ex­pan­ded tax cred­its for young people to en­cour­age them to sign on through the mar­ket­places “would im­prove the com­pos­i­tion of the risk pool in a way that would re­duce costs for every­body, or at least lim­it the growth in costs for every­body.”

But Mc­Cle­l­lan and Whit­lock both cast doubt on see­ing any fixes in the next few months.

Eliza­beth Car­penter, a seni­or vice pres­id­ent at Avalere Health, also ques­tioned wheth­er the next Con­gress would want to re­open Obama­care and how much polit­ic­al cap­it­al the new pres­id­ent would be in­ter­ested in spend­ing on try­ing to sta­bil­ize the mar­ket.

Soon after the news broke of the double-di­git in­crease in ex­change premi­ums, House En­ergy and Com­merce Com­mit­tee Chair­man Fred Up­ton pushed the Re­pub­lic­an plan to re­peal and re­place Obama­care.

Sen­ate Fin­ance Com­mit­tee Chair­man Or­rin Hatch also touted his le­gis­la­tion that would ap­peal the health care law. “That Obama­care has failed to con­trol costs comes as little sur­prise for those who have long warned of such res­ults, and does little to dis­pel the no­tion we are see­ing the law im­plode at the ex­pense of middle class fam­il­ies,” he said in a state­ment.

However, Car­penter ad­ded that if Hil­lary Clin­ton is elec­ted, her ad­min­is­tra­tion might be look­ing for every reg­u­lat­ory op­por­tun­ity to re­store con­fid­ence in the mar­ket.

Clin­ton over the last year has re­leased a slew of health care and drug-pri­cing pro­pos­als. Among them, she says she will en­sure the De­part­ment of Health and Hu­man Ser­vices has the au­thor­ity to block or modi­fy un­reas­on­able health in­sur­ance premi­um rate in­creases. HHS now has the power to re­view par­tic­u­larly large rate in­creases, but it can­not block them.

Whit­lock noted that these in­creases in the 2017 premi­ums were jus­ti­fi­able enough that the fed­er­al and state gov­ern­ments let them move for­ward.

The ad­min­is­tra­tion touted the law’s be­ne­fits this week, in­clud­ing its re­quire­ment that in­surers cov­er people with preex­ist­ing con­di­tions. But it ac­know­ledged that pro­vi­sion was tied to next year’s premi­um hikes.

“Be­cause ex­clud­ing people with preex­ist­ing con­di­tions was pre­vi­ously al­lowed in the in­di­vidu­al mar­ket, there was no data avail­able on how much it would cost to ex­tend cov­er­age to every­one, and many is­suers’ ini­tial premi­ums were be­low ac­tu­al costs,” HHS said.

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