The Insurance Terrain has undergone some seismic changes over the past two years. From deliberate efforts to roll back what some see as the most onerous provisions of the health care law to political machinations likely to undercut its effectiveness, the market for an individual looking for health care coverage has been anything but stable. A new projection suggests that recent Republican-backed changes to the Affordable Care Act will drive up premiums for many Americans, even as some state legislatures are working on solutions to tamp down prices in their insurance marketplaces.
The Center for American Progress last week released new data estimating the changes to premiums in 2019 that the liberal group attributes to what it calls “sabotage” of the Affordable Care Act. Using benchmark data on local premiums from the Kaiser Family Foundation and estimated premium increases from the Urban Institute, the center derived estimated increases in silver care plans – the second lowest of four tiers – at the state and congressional district levels. The analysis suggests that, because low-income individuals will receive tax credits or cost reductions that are built into the health care law, middle class families in rural areas seem poised to see the largest hikes.
“Rating areas with fewer insurers and less competitive markets for physicians and hospitals – generally rural and lower-income areas – face higher premiums,” report author Emily Gee writes. The report estimates that the elimination of the individual mandate, which required most people to buy health insurance or pay a penalty, and the expansion of low-cost, bare-bones short-term insurance plans will have the greatest effect on premiums in states that did not expand Medicaid coverage and that have higher portions of rural, aging populations.
That would mean an average projected cost increase of $6,520 for a family of four or $2,060 for a single 40-year-old in Wyoming, which topped the center’s list of states affected by the Obamacare changes.
And while the federal Terrain is still anything but stable, state policymakers are increasingly turning to state-run initiatives to stabilize premium costs for individuals on the exchange.
To keep premiums down, some states are establishing reinsurance programs – funds that protect providers against the risk of insuring sicker patients who need more expensive care without raising premiums among the wider customer base.
That strategy has seen some success.
In Minnesota, individual premiums are likely to drop in 2019, thanks in part to a state-run reinsurance program funded by what’s called an “innovation waiver.” Authorized in Section 1332 of the Affordable Care Act, the waivers make federal money available to states that opt out of some sections of the act, provided they keep certain consumer protections in place. Kaiser estimates premiums will decrease in 2019 across Minnesota’s bronze, silver and gold plans.
In all, 24 states have considered a request for such a waiver, according to new research from the Montana Healthcare Foundation, though so far only four have applied and been approved by the Department of Health and Human Services.
Recently, the foundation presented its findings at a summit with state policymakers and stakeholders, outlining how other states have used the funds for reinsurance programs.
Though rising premiums are one cause for the decreasing number of Montanans who purchase insurance through the state exchange, according to Christina Goe, the report’s author, it’s too early to tell if lawmakers in that state will pursue that strategy in their upcoming session.
I think that there’s still a lot of uncertainties coming up in 2019 that insurers are trying to deal with,” Goe said.
To some extent we’ll still have to see the impact of some of the recent changes that have been made by the administration.