ACA Repeal: Stabilizing the Market Comes First

The health insurance marketplace is the foundation of any health care reform legislation.

And, just as the foundation of a house must be stabilized before the rest of the structure can be built, the marketplace must be stabilized before any other aspect of health care reform can be put into place.

That was the theme of the National Association of Health Underwriters’ annual Capitol Conference this week. The 27^th annual Capitol Conference was the largest such event in NAHU’s history, with about 940 attendees present, said Annette Bechtold, vice chair of NAHU’s Legislative Council and master of ceremonies for the meeting.

During the event, NAHU members heard from Sen. Lamar Alexander, R-Tenn., chairman of the Senate Health, Education, Labor and Pensions Committee.

Bechtold said Alexander told the group that reform of the Affordable Care Act is likely to take place through budget reconciliation action, with a proposal ready for a vote by the end of March.

“If budget reconciliation goes through, what we feel Congress should do immediately is anything having to do with market stability and keeping people covered where they are while our lawmakers are figuring out how they replace it with something better,” Bechtold said.  “We want to see them keep the small business tax credits and actually expand them to cover maybe more small employers to keep those people covered.”

The premium tax credits should be kept for the time being, Bechtold said. “Otherwise, you will have a lot of people uninsured.

“I think that you’ll see in the budget reconciliation process, Congress will continue to allow those individuals to keep those tax credits for now. We have proposed keeping them in place until 2020 to allow time for something new to take place.”

Repealing the various taxes that were put into place to fund the ACA is another thing that Bechtold said she would like to see happen.

“But what Congress has to be careful of is to make it budget-neutral. Some of the things we want to see,  like the repeal of the Cadillac tax, may not be in the bill this go-around. The Cadillac tax is equally disliked by all on both sides of the aisle, so it’s an easy one to repeal. But it’s worth $90 billion. So unless Congress has something to replace that with, they will need to keep it. But once they have a replacement, removing the Cadillac tax will be easy to do since nobody likes it.”

Other provisions of a possible ACA replacement that Bechtold said would help to stabilize the marketplace include a repeal of the entire medical loss ratio. Although the MLR affects agent and broker commissions, Bechtold said that repealing the MLR would provide more incentive for carriers to design plans that will help them weather some worse-loss years than others and would ultimately keep carriers in the marketplace.

The individual mandate is not doing enough to keep people in the risk pool, Bechtold said, and could be abolished. Instead, she said, the risk pool could be strengthened by changing when and how people can enroll in the marketplace, tightening up special enrollment periods, and allowing carriers to establish hybrid risk pools in which they could assign some later enrollees and higher-risk enrollees.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com.

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.