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
Erin Durkin
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Erin Durkin
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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Republican opposition to the GOP health care bill swelled to near-fatal numbers Sunday as Sen. Susan Collins all but closed the door on supporting the last-ditch effort to scrap the Obama health care law and Sen. Ted Cruz said that "right now" he doesn't back it. White House legislative liaison Marc Short and Sen. Lindsey Graham, R-S.C., one of the measure's sponsors, said Republicans would press ahead with a vote this week." Collins said she doesn't support the bill's cuts to Medicaid, while Cruz said it wouldn't do enough to lower premiums.

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