After years of pushing for full repeal of Obamacare, House Republicans are considering several smaller changes to the law. The Hill reports:
The measures are favorable to health insurers and could help shore up their bottom lines amid heavy financial losses for many on the ObamaCare marketplaces so far.
One bill would allow insurers to charge older people higher premiums to account for the higher cost of their care. The bill would allow older people’s premiums to be five times higher than younger enrollees’, rather than three times higher, as it is under ObamaCare currently.
Another measure would require people signing up for ObamaCare in extra sign-up periods to provide documentation proving that they qualify before enrolling, rather than after.
A third bill would reduce the grace period for enrollees who don’t pay their premiums to 30 days, from 90 days, before they lose their coverage.
All of these are changes which insurers, including those who are sticking with the Obamacare exchanges rather than dropping out, have recommended. Forbes reported in April:
Anthem is talking to the government about possible changes to the marketplace such as updating how customer risk is shared among insurers, changing the exceptions allowed for enrollment outside of the usual time, the grace period for non-payment of insurance premiums and creating new insurance products.
Insurers are calling for these changes because they realize some of their customers have been using the lax rules to game the system. Politico reported on this trend back in January:
Insurers blame the problem on lax rules that allow more than 900,000 people to sign up for coverage outside the standard enrollment season — for instance, when they change jobs or move — without sufficient proof they are eligible. No one knows precisely how many might be manipulating the system, but the plans say they run up much higher medical bills and then jump ship, contributing to double-digit rate increases and financial losses.
Health plans also complain some customers are exploiting a three-month “grace period” — when they can keep getting subsidized coverage even if they’ve stopped paying their share of premiums.
Both those trends make the risk pools skew toward sicker, costlier customers — and under Obamacare, plans can no longer deny coverage to those with expensive medical conditions.
America’s Health Insurance Plans (AHIP), an industry trade group, wrote to the House Energy and Commerce committee in support of the changes. Naturally, Democrats are against them. Rep. Gene Green of Texas tells the Hill the bills would, “only serve to help insurance companies rather than people.”
It’s true the changes would help insurance companies but the alternative, allowing people to continue to game the system, is bound to result in problems in the medium to long term. United Health, the nation’s largest insurer, has already bailed on the exchanges after losing over a billion dollars in two years. Other large insurers are losing money as well which means there are two alternatives for those insurers going forward. One option is to raise rates high enough to cover for the people gaming the system, which harms everyone playing by the rules. The other option is to follow United Health’s lead and back out of the exchanges, which again creates disruption for everyone playing by the rules.
A separate replacement task force is still working on a GOP plan to replace the entire law.