William Lloyd | Reasonable health-care plan can gain support | Editorials

Republican candidates got a boost on the eve of last fall’s election when insurers announced big increases in Obamacare premiums for 2017. Unfortunately, the GOP seems intent on making next year’s premium increases even larger.

According to the nonpartisan Kaiser Family Foundation, the combination of decisions by President Donald Trump and uncertainty about what action Congress may ultimately take to repeal and replace Obamacare has caused insurers to request substantially larger premium increases for 2018 than they would have otherwise.

For customers whose incomes qualify them for significant government subsidies to help pay for insurance, the pending increases may have minimal impact. However, the increases will be painful for the middle-income customers who receive only small subsidies or no subsidies at all.

To some GOP politicians, the promise to repeal and replace Obamacare simply meant scaling back the federal role in health care.

But many voters expected more than that because Trump repeatedly promised that the replacement would reduce insurance premiums and out-of-pocket costs without also reducing coverage.

Therefore, it was understandable that voters rebelled when the nonpartisan Congressional Budget Office estimated that the principal GOP alternatives would actually lead to an increase in out-of-pocket expenses for many consumers, higher premiums for older and sicker customers, and at least 20 million fewer people with insurance coverage in 10 years than would be the case under Obamacare.

Insurers are justifiably concerned about losing money in 2018 unless states approve substantial premium increases this fall.

The federal government may terminate subsidies that reimburse insurers for implementing a legal mandate that caps premiums and deductibles for lower-income policyholders. The Trump administration has paid these subsidies despite ongoing litigation, but the president has warned that he will end the subsidies soon.

The Trump administration also has taken numerous steps that are likely to result in fewer healthy Americans buying insurance for 2018.

Obamacare is based on the assumption that insurers will make enough money by selling policies to young and relatively healthy Americans to offset the high cost of care for policyholders who are older and sicker.

However, despite a mandate that all individuals pay a fine if they are not covered by health insurance, the number of younger and healthier Americans signing up for coverage has always been lower than hoped. Predictably, insurers have responded by raising premiums or abandoning the market.

Instead of trying to reduce premiums for 2018 by increasing the number of younger and healthier Americans who buy insurance, the Trump administration is doing the opposite. Specifically, the administration has suggested it will no longer enforce the requirement that each American have insurance.

In addition, although sicker customers usually buy insurance early and healthier customers procrastinate, the administration has shortened the sign-up period for Obama-care from three months to 45 days.

Furthermore, the administration intends to scale back the advertising that alerts the uninsured of when the sign-up period begins and ends and also to reduce contracts with private groups that help sign up healthier individuals who are less motivated to buy insurance than are sicker Americans.

Although there are bipartisan efforts in Congress and among governors to mitigate the requested premium increases, it is an open question whether those efforts can produce remedies that will pass Congress and win the president’s approval.

Nevertheless, to give these efforts a chance, the Trump administration should at least postpone its plan to sabotage Obamacare through bureaucratic action.

The administration should empower states to allow insurance companies to offer a discount on health-insurance premiums to consumers who are willing to limit their right to sue for medical malpractice except in egregious cases.

Pennsylvania consumers have had such an option for about 25 years as a way to reduce the health-care portion of their auto insurance premiums.

Providing a similar option on Obamacare policies might help reduce health-care costs by eliminating some of the tests that doctors order primarily to protect themselves against potential lawsuits.

That option might be appealing to younger customers who otherwise would not buy health insurance.

In the long term, Trump should translate his oft-stated criticism of high prescription drug costs into a concrete legislative proposal. With strong leadership by the president, a reasonable plan has a chance to attract bipartisan support in Congress.

Republicans have made tax reform a priority for the fall.

However, unless the president acts quickly, the expected increases in health-insurance premiums will wipe out the promised tax cuts for many middle-income Americans.

William Lloyd of Somerset represented Somerset County in the state House of Representatives (1981-1998) and served as the state’s Small Business Advocate (November 2003-October 2011). He writes a monthly column for The Tribune-Democrat.

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