Posted: July 13th, 2018 | By: Lisa Snedeker
The Affordable Care Act (ACA), through the individual health insurance markets, provided coverage for millions of Americans who could not get health insurance coverage through their employer or public programs. However, recent actions taken by the federal government, including Congress’s repeal of the individual mandate penalty, have led to uncertainty about market conditions for 2019. Market stabilization is currently the most critical regulatory issue that public policy officials are facing under the private insurance component of the ACA.
On Friday, July 13, 2018, the USC-Brookings Schaeffer Initiative for Health Policy will host a conference on strategies for stabilizing the individual market. Keynote speaker Professor Mark Hall will present his research findings on a new study, which examines the recent experience of 10 states with respect to individual market stability: Alaska, Arizona, Colorado, Florida, Iowa, Maine, Minnesota, Nevada, Ohio, and Texas. Two expert panels will convene to discuss outlook for the individual market at both the individual state and national level.
A key finding of Hall’s is that most of the market’s current struggle to achieve stability relates to continuing moves by the federal government that have destabilizing effects. As a result, “the main takeaway is that the best thing for the individual market right now is for the Trump administration to simply stop making adverse changes,” Hall says.
In addition, Hall offers several state-level measures for improving the market’s stability:
- Reinsurance, partially funded through a “section 1332 waiver,” can lower premiums roughly 10-20 percent, and encourage insurers to enter or remain in more sparsely populated areas;
- Directly targeting funds to unsubsidized subscribers holds more promise for larger reductions in their premiums, and thus greater increases in coverage;
- States might also consider the “public option” of allowing both subsidized and unsubsidized subscribers to buy into existing Medicaid programs, which have lower provider reimbursement rates;
- To protect ACA markets that are working reasonably well, some states may want to limit non-ACA-compliant coverage options. However, in states where the ACA market is beyond repair for unsubsidized people, offering them a less expensive non-ACA option may be the least-worst path forward;
- Investing in marketing and enrollment assistance can improve the risk pool, as can replacing the individual mandate with an alternative incentive for enrollment;
- Giving insurers some flexibility to adjust their rates mid-year can increase their confidence in remaining in the market and being more parsimonious in setting their initial rates.
Professor Hall, founder of the law school’s Health Law and Policy Program, is one of the nation’s leading scholars in the areas of health care law, public policy, and bioethics. The author or editor of twenty books, including Making Medical Spending Decisions (Oxford University Press), and Health Care Law and Ethics (Aspen), he is currently engaged in research in the areas of health care reform, access to care by the uninsured, and insurance regulation. Prof. Hall has published scholarship in the law reviews at Berkeley, Chicago, Duke, Michigan, Pennsylvania, and Stanford, and his articles have been reprinted in a dozen casebooks and anthologies. He also teaches in the University’s Graduate Programs for Bioethics and its MBA program, and he is on the research faculty at the Medical School. Prof. Hall regularly consults with government officials, foundations and think tanks about health care public policy issues.
The Brookings Institution is a nonprofit, public policy organization based in Washington, D.C. Its mission is to conduct in-depth research that leads to new ideas for solving problems facing society at the local, national, and global level.