Public Option Would Be Destabilizing, NAHU Exec Says At CapCon

The public option would destabilize current insurance markets, while the cost of Medicare for All is not sustainable.

Those are among the talking points members of the National Association of Health Underwriters will discuss with their representatives in Washington during this week’s virtual NAHU Capital Conference. The conference kicked off Monday with a rundown of the legislative and regulatory issues foremost on NAHU members’ minds.

The association continues its opposition to a public option, which would establish a government-funded health plan to compete with private health insurance.  The public option “would destabilize current insurance markets by creating an unlevel playing field,” said Chris Hartmann, NAHU vice president of congressional affairs. “This would have the devastating effect of closing hospitals.”

A public option would destabilize the market by compelling providers to accept payments at much lower rates than private carriers can require them to accept, he said. More than 1,000 rural hospitals would be put at high risk of closure under a public option by using Medicare provider reimbursement rates. These hospitals depend on a mixture of patient payment methods to allow them to provide services.

In addition, Hartmann said, the public option raises the questions of how much it would cost and how it would be paid for.

Last week, U.S. Sens. Michael Bennett, D-Colo., and Tim Kaine, D-Va., reintroduced the Medicare-X Choice Act, which would create a public option by expanding on the Affordable Care Act and Medicare. Under Medicare-X, the public option would initially be available on the individual exchange in areas where there is a shortage of insurers or higher health care costs due to less competiton. By 2025, the Medicare Exchange plan would expand to every ZIP code in the country and be added as another option on the Small Business Health Options Program Marketplace.

President Joe Biden said he favors establishing a public option as well as permitting a Medicare buy-in at age 60.

The cost of Medicare for All is not sustainable, Hartmann said, adding that such a plan would carry a price tag of $32 trillion over 10 years and an average tax increase of $24,000 per household at a time when the financial viability of our current Medicare plan is already in question.

NAHU’s position on Medicare for All is that it would reduce standards of quality, eliminate choice, and create delays in treatment and access to care. This would be the result of doctors being unable to treat as many patients for the amount they would be paid, some doctors dropping out of the system, and continued financial pressure on hospitals.

Other health-related issues are on the NAHU conference agenda:

COVID-19 Relief

NAHU is urging Congress to continue the Paycheck Protection Program loans as needed throughout the pandemic to allow more Americans to maintain or obtain health insurance coverage both in the group and individual markets, and allow employers to stay in business and maintain employment.

The pandemic is affecting administrative compliance with employer-reporting rules. NAHU wants Congress to suspend enforcement during the pandemic for employer-reporting provisions such as responding to 226-J letters, calculating affordability requirements for 1095 forms and calculating ALE status with variable-hour employees.

Market Stabilization

NAHU is urging Congress to preserve the employer tax exclusion, noting that the employer-sponsored health insurance system provides private-sector, market-based coverage for more than 175 million Americans. Along with the mortgage interest tax benefit, the employer tax exclusion is the largest tax benefit in the U.S., Hartmann said. COVID-19 has proven how the employer-sponsored market is, and the failure to preserve the tax exclusion would put all of those covered lives in jeopardy.

The cost of prescription drugs is another issue NAHU members will discuss with their representatives. NAHU is calling for bringing down prescription drug costs by eliminating impediments to drugs getting to market, and considering methods used by other countries, such as an international pricing index.

NAHU also favors a new voluntary reporting system for employers, reducing the number of individuals and amount of information reported, eliminating the requirement to collect Social Security numbers of dependents enrolled in employer coverage, and easing reporting provisions.

The “family glitch” is the ACA rule that bases eligibility for a family’s premium subsidies on whether available employer-sponsored insurance is affordable for the employee only, even if it’s not actually affordable for the whole family. NAHU is asking Congress to clarify that employee eligibility for affordable coverage does not extend to family members if there is not an affordable employer contribution to dependent coverage.

Medicare

NAHU wants COBRA coverage to count as creditable coverage for Medicare beneficiaries just as employer-sponsored coverage does. This will allow beneficiaries to have access to Part B on a timely basis without penalties for late entry into the program.

NAHU also has proposed Medicare allow observation stays to be counted toward the three-day mandatory inpatient stay for Medicare skilled-nursing coverage.

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 [email protected]. 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 [email protected].