For once, we have to agree with President Donald Trump: It is not yet time for Congress to move on from health care.
Granted, we have something a bit different in mind about what the legislative branch should do next. While Trump is fixated on pushing the repeal-and-replace rock up the hill again and again, we are encouraged by an emerging effort in Congress to find bipartisan solutions to shore up the existing system – and, not incidentally, prevent the Trump administration from making its predictions about the Obamacare death spiral a self-fulfilling prophecy.
On Sunday, Politico reported that the House Problem Solvers Caucus, a group of moderate Democrats and Republicans, is working with other centrists on a package of reforms to stabilize the state insurance exchanges – many of which are facing the possibility of sharply rising rates at least in part as a result of the uncertainty in Washington.
Perhaps the most important item is a guarantee that the federal government will continue making cost-sharing subsidy payments to insurers. That’s a mechanism of the ACA designed to compensate insurance companies for costs associated with the law’s requirement that low-income consumers be spared excessive out-of-pocket expenses for co-pays, deductibles and co-insurance. It’s worth about $7 billion a year to the insurers, and without it, pressure on rates would skyrocket. The Trump administration has long threatened to stop making the payments, and if the president wants to “let Obamacare fail” that would be a prime way to do it.
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Another big one is the creation of a nationwide system of reinsurance, a mechanism that helps deal with a phenomenon called “adverse selection.” Because the Affordable Care Act prevents insurance companies from denying people coverage because of pre-existing conditions or from charging them more when they become sick, the insurance pool in most places has skewed toward those with high medical expenses. Reinsurance programs, which have shown promise in some states – including, notably, some heavily Republican ones – provide subsidies to insurers to help cover some of those expensive patients, thereby reducing the pressure to increase premiums on everyone else. The ACA had a temporary reinsurance program, but Republicans in Congress refused to fund it, and insurers got only pennies on the dollar for what they should have been owed.
The three other elements of the plan scratch some Republican itches without gutting the ACA as a whole. One would repeal a tax on medical devices, which generates relatively little revenue (about $20 billion over 10 years) but has led to a massive lobbying effort from manufacturers and has been a target of some Democrats’ ire as well. Getting rid of that tax was part of the “skinny repeal” plan that died in the Senate last week. Another would require businesses to provide coverage only if they have more than 500 workers, up from the current 50. This, too, would have relatively little impact, since the vast majority of businesses with 50 employees provided employee health plans before Obamacare anyway. Finally, the proposal includes mechanisms to facilitate the sale of health insurance across state lines – another perennial Republican policy goal. Democrats have long objected to the idea on the grounds that it could lead to a race to the bottom in which insurers flock to states that allow them to sell low-premium policies that offer little value. That’s a legitimate concern, but the reality is that insurers would have trouble taking advantage of interstate sales because of the expense and difficulty of setting up physician and hospital networks. Some states have attempted to allow sales from elsewhere in the past but found no takers for that reason.
On the whole, the Problem Solvers plan would in fact solve problems. But there’s a big one Congress can’t easily address, which is the possibility that President Trump will stop enforcing the requirement that individuals buy insurance. When asked about it on ABC’s “This Week” on Sunday, Health Secretary Tom Price claimed that the mandate was “driving up the cost for the American people in terms of coverage” and indicated that his agency might stop enforcing it. Even hinting that the administration doesn’t take the mandate seriously could have a hugely detrimental effect on the insurance exchanges because a key driver of cost increases is the number of younger, healthier people who choose to pay a fine rather than buy coverage. If there’s no penalty, the problem will get worse.
The courts would be the only real recourse for ACA supporters if President Trump decides to flout his responsibility to enforce the law. But Congress can act now to stave off some of the other chaos the president is trying to sow. Insurance regulators are grappling right now with setting premiums for next year. There’s no time to lose.