In­sur­ers seek to shape GOP re­peal-and-re­place plans

Modern Healthcare - - NEWS - —Shelby Liv­ingston

The health in­sur­ance in­dus­try is brac­ing for the near cer­tain end to the core cov­er­age pro­vi­sions of the Af­ford­able Care Act, the frame­work they’ve been op­er­at­ing un­der for the past six years.

The in­dus­try also is wait­ing to learn the fate of two multi­bil­lion-dol­lar merg­ers that could re­duce com­pe­ti­tion and raise pre­mi­ums in some mar­kets. Court de­ci­sions in the Jus­tice De­part­ment’s law­suits chal­leng­ing pro­posed com­bi­na­tions of Aetna and Hu­mana, and An­them and Cigna, are ex­pected to come in Jan­uary.

Pres­i­dent-elect Don­ald Trump and GOP law­mak­ers have promised to re­peal the ACA as soon as pos­si­ble. But in­sur­ance lead­ers worry a re­place­ment for the law may take sev­eral years to put to­gether. That un­cer­tainty, cou­pled with the po­ten­tial re­peal of poli­cies such as the in­di­vid­ual man­date and cost-shar­ing sub­si­dies for low­in­come ex­change plan mem­bers, could prompt in­sur­ers to flee the mar­ket­places.

While con­sumers aren’t likely to see big changes in their health cov­er­age in 2017, the fol­low­ing year is an­other story. With­out know­ing what kind of re­place­ment Repub­li­cans will en­act, in­sur­ers will have a hard time set­ting rates for 2018 in­di­vid­ual and small group plans, which are due in the spring.

Ask­ing them to stick around for a few years with­out an inkling of the new rules is “a pretty tough sell for in­sur­ers los­ing money,” said Erin Tr­ish, a health pol­icy pro­fes­sor at the Univer­sity of South­ern Cal­i­for­nia.

Be­cause they don’t want to see the in­di­vid­ual mar­ket col­lapse, in­sur­ers will be work­ing with Congress over the next year for re­forms and safe­guards to en­sure it stays afloat. They will push for greater free­dom to vary pre­mi­ums by age and to de­sign ben­e­fits to ap­peal to dif­fer­ent de­mo­graphic groups, while re­tain­ing some mech­a­nism to main­tain a bal­anced risk pool by pres­sur­ing younger peo­ple to buy cov­er­age. Mean­while, the out­come of the Jus­tice De­part­ment’s an­titrust law­suits to block the pro­posed merg­ers in­volv­ing the four in­sur­ance gi­ants could de­ter­mine how other in­sur­ers seek to com­bine in the fu­ture. A green light from the courts could spur oth­ers to com­bine, fur­ther re­duc­ing com­pe­ti­tion and con­sumer choice in health plans. A gov­ern­ment loss in the Aet­naHu­mana case in par­tic­u­lar “would be a huge sig­nal to go forth and merge to the point of es­sen­tially mo­nop­o­liz­ing” the Medi­care Ad­van­tage mar­ket, said Thomas Gre­aney, a St. Louis Univer­sity law pro­fes­sor and for­mer as­sis­tant chief in charge of health­care an­titrust en­force­ment at the Jus­tice De­part­ment. Gre­aney be­lieves the gov­ern­ment has a strong case in both tri­als. At the same time, in­sur­ers and other health­care in­dus­try play­ers will be deal­ing with cost pres­sures, no­tably for pre­scrip­tion drugs. “So how do they push the Trump ad­min­is­tra­tion to deal with that?” asked John Ho­la­han, a health pol­icy fel­low at the Ur­ban In­sti­tute. “You can’t go back to Repub­li­can or­tho­doxy and say the mar­kets will solve this prob­lem. They won’t.” In­sur­ers are also closely watch­ing GOP pro­pos­als to dra­mat­i­cally re­struc­ture Med­i­caid and Medi­care. They have un­cer­tain im­pli­ca­tions for in­sur­ers but could ex­pand their op­por­tu­ni­ties for lu­cra­tive gov­ern­ment busi­ness.

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