Never in legislative history has a piece of legislation been subject to so many “fixes” and caused so much confusion and so many headaches.
If people have been frustrated by the long waits to sign up for coverage on the government’s website, Healthcare.gov, or the confusion about keeping their doctors and health plans as promised by Obamacare, it’s time to prepare for more fallout from the Affordable Care Act.
Some members of Congress from both parties are discussing new legislation, the “Obamacare Bailout Prevention Act” (HR 3541 and S. 1726), that would drive up insurance premiums.
The bill is proposing to do away with temporary safety net programs put into place by the ACA to keep costs down for consumers and offset the risk associated with the law’s requirement that insurers issue policies to everyone, no matter their health status or pre-existing condition.
This is important, considering one unhealthy individual can literally incur millions of dollars in claims in a single year and still pay the same premium that a very healthy person with no claims would pay.
Under these safety net programs, insurers who end up with a very unhealthy population (large claims) are reimbursed certain amounts by the government to offset those claims. Similarly, insurers with a very healthy population (smaller claims) are required to pay certain amounts back to the government if they make too much money. So it is misleading to characterize the program as a “bailout” of insurance companies.
It’s actually a two-way street designed to also help the government ensure the success of the ACA and keep costs down for consumers.
Without these programs in place, the insurance industry and insurers such as Blue Cross and others run the very real risk of destabilization. Of equal concern is what will happen to premiums if these programs are discontinued. The U.S. Department of Health and Human Services estimates the safety net program will reduce premiums in the individual market in 2014 by 10 percent to 15 percent compared with what they would have been absent this program. On the other hand, if these safety net programs disappear, consumers can easily expect to see these types of rate increases.
If consumers value their insurance, and want the ACA to work as intended where everyone is covered — even those with preexisting conditions — then mandates and these safety net programs must be part of the package.
As one of the few insurers in Louisiana who chose to participate in the Health Insurance Marketplace —and the only one offering plans in every parish, in every ZIP code and at every metal level — we opened ourselves up to considerable risk. These safety net programs established by the ACA will offset some of the risk.
We’re hoping our government leaders realize what’s at stake here. In the not-so-long run, eliminating these safety net programs won’t just lead to the failure of the ACA. There is a good chance it will also jeopardize the entire private health insurance market and ultimately lead to a single-payer system, more government control, less choice and higher taxes.
Given the potential fallout if this law is passed, and the ongoing confusion around the ACA, we’re in for a long, bumpy ride. I think we can expect more challenges and detours ahead. Better buckle up.
president and CEO, Blue Cross and Blue Shield of Louisiana