ACA Premium Spike Feared After Stabilization Effort Fails In Congress

Congress failed to tamp down Obamacare premiums in last week's spending bill, shifting the burden onto states, where governors and legislatures are facing growing pressure — but few good options — to bring down rates before companies finalize their 2019 prices.

Politicians at all levels of government are fearing another round of sticker shock for consumers this fall as insurers jack up prices, blaming both the original 2010 health law and the moves Congress and the Trump administration have made to undercut it in the years since.

Capitol Hill had a chance to lower rates with a stabilization bill Republicans had hoped to attach to last week's spending package. But Democrats balked, and Congress likely missed its last chance to act before the new rates are set.

With federal policymakers sputtering, states are plotting their own steps, seeking federal permission for "reinsurance" program that subsidize pricey customers or waiting for final instructions from the Trump administration on short-term plans that don't fully comply with Obamacare's strict coverage requirements.

A few blue states are considering a restoration of the "individual mandate" to buy insurance or pay a tax, after congressional Republicans axed penalties tied to the federal version under Obamacare, starting in 2019.

Maryland Gov. Larry Hogan this week said he's ready to sign a one-year fix that will redirect a $380 million — the windfall insurers were set to receive from the GOP's tax bill — into a state tax that subsidizes its most expensive enrollees on the Obamacare exchange. He's also set to approve a companion measure that asks the Trump administration to sign off on a long-term "reinsurance" program that remits savings from subsidy dollars, which would have been spent to blunt higher premiums, back to the state.

Maryland officials said their market was spiraling out of control, so they had to do something in face of Congress' dithering.

"They have done nothing to improve the market, short-term or long-term," Maryland Insurance Commissioner Al Redmer Jr. said.

Elsewhere, Wisconsin Gov. Scott Walker signed a bill that authorizes his state to submit its own waiver for a reinsurance program. If the federal government approves it, Wisconsin would join Alaska, Minnesota and Oregon as states with reinsurance programs.

Others states are still figuring out what's feasible.

Rhode Island, for instance, is exploring whether they should copy neighboring Massachusetts by approving its own individual mandate.

"We thought, hopefully, that relief was coming through federal reinsurance. Now we're trying to figure out what to do at the state level," said Kyrie Perry, a spokeswoman for HealthSource RI, the state-run insurance exchange. "There's of work to do between now and the end of our state legislative session."

Other states have run into obstacles, or might not have the time or opportunity to pass fixes.

Washington State explored legislation to set up a reinsurance program, but couldn't settle on how to finance it.

Heather Korbulic, executive director of the Silver State Health Insurance Exchange in Nevada, said lawmakers in her state won't convene again until February, since they meet every other year, so bold efforts to stabilize their markets will have to wait for future years.

For now, Nevada is using its marketing skills to stress the economic benefits of being insured instead of lacking coverage, plus federal subsidies that will blunt rising cost for the vast majority of customers.

"I like to focus on what we have control over," said Ms. Korbulic, who felt federal reinsurance money would have "gone a long way" in stabilizing the markets.

Congressional Democrats say Republicans poisoned efforts to post the cash by including pro-life language that went beyond the 2010 law's status quo, though the GOP said liberal members mostly wanted to blame Mr. Trump for rising premiums before the mid-term elections.

Democrats were also bitter over the GOP's decision to repeal the individual mandate, saying it made stabilization efforts into a patch for new problems.

Besides reinsurance money, the proposal would have restored cost-sharing reimbursements to insurers, expanding the range of cheaper options for healthier people and streamlining the waiver system that lets state experiment under the Affordable Care Act.

Official who run Obamacare's wobbly exchanges said they could have used the boost, since actuaries predict that repeal of the mandate alone will increase premiums by an average of 10 percent.

"States don't print money, and individual markets, to become stable, need an infusion of federal dollars," said Mila Kofman, executive director of the D.C. health exchange.

D.C. Mayor Muriel Bowser's latest budget included a city-based version of the individual mandate, though it will be up to council members to vet and approve the measure as they debate spending plans through the summer.

Connecticut Gov. Dannel Malloy, a Democrat, submitted a similar proposal to his state legislature, which is meeting through May.

Besides these deep-blue areas, few states will be willing to confront the political and logistical challenges of passing their own mandate, analysts say. It was the most unpopular aspect of the federal law, so reinsurance waivers are a more likely option for states that still have time to act.

"There is a template for doing this based on what a handful of states have already done, but the clock is ticking," said Larry Levitt, senior vice president for Kaiser Family Foundation. "States would have to move fast to have reinsurance programs in place to affect premiums for 2019."

Other states are trying to find ways to get around Obamacare, saying its robust coverage requirements nudged healthier people out of market.

The Centers for Medicare and Medicaid Services rejected Idaho's plan to offer plans the impose annual limits on claims and set prices based on medical history. But it did say pending regulations that would allow insurers to sell "short-term" plans for a full year may offer a way forward, so Idaho should stay tuned.

Exchanges officials in bluer areas of the country are worried that offering skimpier plans will only make things worse, by siphoning off much-needed healthy consumers from the exchange markets and forcing sicker people to pay even more for comprehensive coverage

"Part of my own frustration is it's almost like whatever the states do, it will never be enough because the federal administration keeps attacking the ACA," said Ms. Kofman in D.C. "It's never enough, because the next day the federal administration can come out and do something else that's harmful to the markets. It's very hard to stay ahead of that."