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Update on Colorado’s Health Insurance Marketplace, Connect for Health Colorado.

The following article was written by Political Consultant Cindy Sovine-Miller:

Congress Must Stop Using Health Insurance as a Political Weapon

 

Since the rollout of the Federal Health Insurance Exchange, failed technology, glitches and uncertainty have plagued the Obama administration.  In Congress, both sides of the aisle are engaging in political theatrics around the Affordable Care Act (ACA).  Vulnerable Democrats who fear 2014 election repercussions for supporting a flawed health care reform law are trying to delay and even repeal the individual mandate.  Conservatives, looking to capitalize on the unpopularity of the law, are throwing support behind proposals that would tear the ACA apart from the inside out.  The latest issue to make headlines is the proposed elimination of risk corridors, which were designed to keep insurance prices stable and protect consumers from high cost increases in the first few years of implementation.

 

The problem with these proposals is that they do nothing to control or reduce health care costs. The law is already in place and businesses already accountable to its provisions.  Without meaningful reforms, brought together with bi-partisan effort and stakeholder input to replace the existing law, these actions would have disastrous effects on the ACA, and ultimately on the American people.  While the failure of the ACA may be the goal for some, the inevitable conclusion for this country should private insurance markets fail, is socialized medicine.


I have come to think of implementation of private health insurance reforms in the ACA as a delicate balance on a three-legged stool.  The three components must in concert with one another if the private marketplace is to have a chance at being successful:

                 

        1.      Universal Access – The most widely supported provision in the ACA, known as Guaranteed Issue in industry terms, requires insurance companies to accept everyone that applies for coverage regardless of their health status.  Nobody can be denied coverage for any reason; nor can individuals be charged more for their health history.  This is one of the most costly provisions in the ACA.  Imagine what would happen to prices for homeowners insurance if you were allowed to enroll for coverage while your house is on fire.

 

There is very little discussion in Congress for changing this particular component of the ACA. In fact, there is broad based support on both sides of the aisle.  Individuals are guaranteed coverage with comprehensive mandated health benefits.  However, with these new benefits come new, unpredictable costs. 

        2.      Participation – The Individual Mandate was put in place on the principle that everyone must participate in the insurance pool in order to keep the market place viable and costs sustainable.  Young health individuals must sign up alongside those with health issues to balance the costs. The Individual Mandate in the ACA is weak, but does provide some incentive for individuals to be in the insurance pool.     

 

Vulnerable Democrats are now trying to delay and even dismantle the individual mandate.  Without having the mandate in place to ensure as much participation as possible, the costs associated with the ‘risk’ of insuring an unpredictable marketplace with the guaranteed benefits becomes so high that most people will not be able to afford coverage.  

        3.      Affordability – Though a person is guaranteed access to insurance, they still must be able to afford it.  It is unknown what costs will look like in year 2, 3 or later.  A temporary safety valve known as “risk corridors” was built into the law and designed to keep premiums stable in the face of unavoidable uncertainty as the private markets transition to new models of coverage.  These provisions encourage choice and competition and ensure a viable, private market that protects consumers from high cost spikes during the initial years.

 

You may have heard that Conservatives talking about insurer ‘bailouts’.   They are referring to risk corridors.  The risk corridor is not a bailout, or a new idea.  It has been for there insurers and for homeowners since 1968, when Congress established the National Flood Insurance Program—the program that enables private home owners to get insurance for coastal houses by providing a financial backstop for insurers.  A similar mechanism is in place for crop insurance.  In the ACA, they are only in place for three years.   Without these provisions in place, 2015 insurance rates will go up significantly because the insurance company’s risk is greater.

 

In a recent  Forbes blog post, Grace-Marie Turner (of the right leaning Galen Institute) warns the GOP strategy could backfire if a repealed risk provisions bill becomes law:  "Republicans could be blamed for causing premiums to be even higher than they will be next year." 

 

Businesses and individuals who pay for insurance should not be collateral damage of the political bomb-throwing across the aisle.  In the end, it’s the American people who lose.

 

Cindy Sovine-Miller is a Health Care Political Consultant, and the Chair of State Chamber of Health Care Committee for the Colorado State Association of Health Underwriters. 


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