Washington – Aetna’s decision to abandon 11 state Affordable Care Act marketplaces combined with the shrinking participation of other insurers has prompted Washington advocates to look for new ways to strengthen state outlets like Connecticut’s Access Health CT.
Though advocates insist the health insurances exchanges are still healthy, the response to the Aetna development and others involves tweaking parts of the 6-year-old health law – one that has caused some of the deepest divisions ever on Capitol Hill. Republicans, meanwhile, are renewing their calls for repeal of most of the law’s provisions.
The insurance industry has its own ideas, too.
In an issues brief, the insurance industry association America’s Health Insurance Plans has recently proposed several changes aimed at helping insurers make more profit on the policies sold to individuals and small businesses through the exchanges. Aetna said it decided to pull out of the exchanges because it had lost $430 million on the marketplaces since 2014, a tiny fraction of its $60 billion in annual revenues.
Insurer recommendations include scrapping a requirement that the oldest – and likely the sickest — customers pay no more than three times the amount in premiums that the youngest policy holders do. AHIP would like the 3-to-1 ratio changed to a 5-to-1 limit that existed in most states before the ACA was approved.
Another thing insurers would like to change is the ACA minimum medical loss ratio, which caps the revenues insurers can raise from selling policies after claims and certain other expenses are met. Insurers would like fraud prevention costs added to those expenses.
They also would like greater scrutiny of those allowed to purchase insurance in the exchanges outside the normal November through December enrollment period. Under the ACA, loss of a job and some other factors allow people a special enrollment period. AHIP would like fewer of them, and the Obama administration said it will tighten the requirements for special enrollment.
Sen. Chris Murphy, D-Conn., said although there are special qualifying events that allow people to purchase policies on the exchanges outside normal enrollment periods, special enrollment periods also allow people who don’t qualify – and tend to be sicker — to game the system.
“We need to crack down on these people,” Murphy said. “Some exchanges are too liberal.”
A member of the Senate Health, Education, Labor and Pension Committee and a staunch defender of the ACA, Murphy said there is no “crisis” facing the insurance exchanges, as many Republicans have said after Aetna’s announcement this week.
“The exchanges are still in good shape,” he said. “The insurers who say they are leaving are getting all the media attention, but not the ones who say they are expanding.”
Cigna is among those. The Bloomfield-based insurer sold plans in seven states this year and plans to expand to Illinois, North Carolina and Virginia next year.
Still, insurers say changes are needed.
Aetna and other insurers abandoning state marketplaces like UnitedHealthcare, which is pulling out of Access Health, say the presence of older, sicker-than-expected customers in the exchanges has hurt them.
They want a permanent repeal of an ACA tax on policies that helps fund the law — a tax Congress has repealed for 2017 — and have also called for strengthening the ACA programs aimed at minimizing risks from a bad risk pool.
One strengthening program is a risk adjustment that moves money from plans whose customers are healthier than average to plans whose customers are sicker than average. Another, called “risk corridors,” moves money from plans with unusually high gains to plans with unusually low gains. There are also reinsurance fees on all the participating insurers to create a fund that is used to reimburse insurers whose customers file costlier-than-expected claims.
But under the ACA, both the reinsurance program and the risk corridors are scheduled to expire this year. And a budget agreement approved by Congress prevents the Obama administration from bolstering the risk corridor program with extra money.
Another concern for insurers as the ACA enrollment period nears is that after a period of historically slow growth rates, U.S. health care spending is once again on the rise, increasing 5.5 percent last year. Insurers say the increase is based largely on the expanded coverage mandated by the ACA as well as increases in prescription drug costs. Insurers want the federal government to do something to rein in drug costs.
“The solutions are clear, time-tested and doable. Promoting a strong, stable private insurance market provides more choices at lower costs,” AHIP President Marilyn Tavenner said in an op-ed this week.
Although the ACA has sparked bitter partisan battles in Congress, and the House GOP has voted dozens of times to repeal all or parts of it, there is some bipartisan legislation pending that could address some insurer concerns, including limitations on special enrollment periods.
And the Obama administration has promised to help push for the enrollment of more people, including younger ones, through the exchanges.
Republicans who press for replacing the ACA have proposed a plan that would allow selling plans across state lines – now prohibited by federal law – implementing health savings accounts, and increasing the Medicare eligibility age from 65 to 67 years old. The GOP plan would keep the ACA’s requirement that insurers cover patients with pre-existing conditions, but abolish the health care law’s Medicaid expansion.
Meanwhile, Sen. Hillary Clinton is proposing to include a “public option” or government-run health insurance plan on the exchanges to compete with the offerings of private insurers.
Murphy said implementing the public option would be the best way to strengthen the exchanges and provide more competition. But it was an idea that was pulled from the Affordable Care Act to try to win more political support.
“The public option enjoys strong political support, but it doesn’t fly with Republicans,” Murphy said.
Nor does it fly with insurers.
But another Clinton health care idea, which insurers can embrace, would require marketplace participants to pay no more than 8.5 percent of family income in premiums before receiving subsidies.