AHIP Makes 12 Recommendations To Lower Health Care Costs

About 13 million people purchase their own health insurance through the individual marketplaces. About 5 million of them don’t quality for any financial assistance, such as tax credits or subsidies, to help cover the cost of that health insurance.

Those 5 million Americans earn more than 400 percent of federal poverty level, and they fall into a gap, said America’s Health Insurance Plans, earning too much to qualify for financial support, but still struggling to pay their monthly premiums.

AHIP released a white paper with 12 recommendations that that federal or state leaders can implement to drive down premiums, increase participation in the marketplace, and offer savings to consumers.

“Families making over 400 percent of the federal poverty level are hit the hardest without any financial cushion,” said Jeanette Thornton, senior vice president of employer and commercial plans for AHIP. “The goal of this new paper is to close this gap, ensuring every single American can afford their health coverage regardless of income, health status or pre-existing conditions.”

The white paper noted three issues that drive up health care premiums. They are

1. The cost of health care services and prescription drugs.
2. Families making more than 400 percent of the federal poverty level are the only segment of the American population that doesn’t receive some help with their insurance premiums.
3. Too few healthy people participate in the individual market to balance out the risk.

Although the white paper focuses on improving premium affordability for those who don’t qualify for federal support, AHIP said many of the recommendations will drive down premiums for everyone, reducing the total cost of subsidies and the financial burden they place on taxpayers.

Individual market premiums are becoming more stable, AHIP said. Nonetheless, in some regions, premiums are too high for many Americans. When families can’t afford premiums for comprehensive coverage, some decide to purchase leaner coverage– or even go without coverage at all. That can put their health and financial security at risk.

AHIP’s recommendations address three basic goals.

1. Address rising health care services costs and drug prices.

AHIP recommended reducing surprise billing, curbing inappropriate third-party premium payments, increasing drug competition, expanding the use of telehealth, and increasing flexibility for reference pricing.

2. Offer premium savings to families making over 400 percent of the federal poverty level.

AHIP made recommendations aimed at bringing financial parity to the individual market. The organization advocated for amending the Internal Revenue Code to allow individual market health insurance premium costs to be deductible for federal income tax purposes for those who do not qualify for premium tax credits.

In addition, AHIP recommended expanding health savings account options, creating reinsurance programs, creating state premium discount programs and repealing the health insurance tax.

3. Increase the number of consumers buying coverage, which will balance the individual market risk pool to bring costs down for everyone.

AHIP recommended reducing surprise billing, curbing inappropriate third-party premium payments, increasing drug competition, expanding the use of telehealth, and increasing flexibility for reference pricing.

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. Follow her on Twitter @INNsusan.

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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.