ACA Future: Insurers Baffled By Lack of Clear Message

Health insurers are perplexed by the lack of a clear message about the future of the ACA. Insurers are also frustrated as they wait to see if the government will pay subsidies for their ACA participation.

According to insurers, a strong statement of intent is required to help them decide whether to participate in the individual ACA market exchanges next year.

While the Department of Health and Human Services recently stated that it has not changed the precedent that would see the government agency continue to pay for the Affordable Care Act’s cost-sharing reduction payments to health insurers while a lawsuit over the subsidies is still pending, insurers remain unconvinced.

“You can’t run a multimillion dollar health plan on a nice statement,” says Ceci Connolly, the president and CEO of The Alliance of Community Health Plans.

Many insurers are required by law to file their 2018 premium rate requests by June 21, but insurers are focusing on two key dates: April 28, when government funding is set to expire, and May 22, when the House of Representatives and the Trump administration are scheduled to update the status of a U.S. Court of Appeals lawsuit over such payments.

House Speaker Paul Ryan says the lawsuit will stand as Republicans seek to clarify whether the White House has the authority to make subsidy payments without specific appropriations from Congress. Some House Republicans claim to have a plan in the works that would guarantee those appropriations in order for insurers to continue receiving subsidy payments.

“While the lawsuit is being litigated, then the administration funds these benefits. That’s how they’ve always done it, and I don’t see that changing,” Ryan said last month.

During the previous administration, House Republicans filed the lawsuit over “cost-sharing reductions,” or CSRs, which were intended to reimburse insurers for providing lower-cost deductibles to low-income ACA enrollees.

Insurers are concerned that the payments will be discontinued, resulting in market chaos and insurer withdrawal from the marketplaces.

Ryan stated that the administration will continue to fund the payments while the lawsuit is being resolved.

According to Kristine Grow, senior vice president of communications for America’s Health Insurance Plans, insurers’ ability to serve consumers will suffer as a result of a lack of information.

“Plans need more certainty. As plans make decisions for 2018, they do so with a view of wanting to serve consumers in the market for the full year. That’s why it’s so important to know what will happen with CSRs long term,” Grow says.

According to a Kaiser Family Foundation analysis, insurers would need to raise the average premium for a silver plan sold on the ACA marketplace by 19 percent to compensate for the lost funding if the federal government fails to provide the subsidy payments.

“It’s been clear to us for a while, based on public and private conversations, that the administration and leaders in Congress understand how important the cost-sharing reductions are,” Connolly says. “That’s very positive. But we continue to look for certainty because businesses need to make rational decisions about products and pricing.”

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