People with significant health issues could wind up getting priced out of the insurance market under legislation recently passed by the House to repeal and replace key parts of the Affordable Care Act (ACA), warns UMass Medical School expert Terry Dougherty, MPH.
Passed by House Republicans, the American Health Care Act (AHCA) would dramatically changes the non-group insurance market – which is individuals buying coverage through health care exchanges set up in states under the ACA.
States seeking to reduce overall insurance premiums would be able to apply for federal waivers to move sicker individuals into separate, high-risk insurance pools. This would eliminate the community rating system used under the ACA in which everyone – the healthy as well as those with medical issues – are combined in a single pool for setting premiums.
Dougherty contends this is unlikely to substantially reduce the turbulence that has afflicted the individual insurance market over the past few years, with premiums rising and some insurers pulling out of the exchanges.
“In the non-group insurance market that this bill also impacts, there is a prediction that the turbulence will continue,” says Dougherty, executive director of Health Systems Transformation.
While ending the community rating approach won’t necessarily bring stability to the overall non-group market, it could have a dire effect on the access to health insurance among people dealing with various medical and health concerns.
Putting older and sicker people into separate, high-risk insurance pools is likely to send insurance costs through the roof for these individuals, Dougherty contends.
“Mathematically, that just drives the cost up,” notes Dougherty, a former director of the Massachusetts Medicaid program, MassHealth.
About one-sixth of states are likely to seek waivers, according to a recent Congressional Budget Office (CBO) analysis of the Republican health care legislation. Even with the addition of some extra funding to help mitigate those costs, premiums in those high-risk pools are likely to be unaffordable, the report finds.
“There is a fairly strong prediction that for those folks coverage will be completely unaffordable for them and you still have a turbulent, non-group market for folks not in that group,” Dougherty says.