National Health Groups Urge Action to
Stabilize Individual Insurance Market
Date of Publication (April 15, 2017)
The AMA this week joined with other organizations representing insurers, hospitals, health plan purchasers, and physicians in sending letters to Congressional leaders and President Trump urging them to address an imminent threat to the stability of the individual health insurance market. “As providers of healthcare and coverage to hundreds of millions of Americans, we share many core principles and common priorities. We believe that every American deserves affordable coverage and high-quality care. We stand ready to work with all members of Congress and the Administration to keep this commitment. A critical priority is to stabilize the individual health insurance market. The window is quickly closing to properly price individual insurance products for 2018.”
In their correspondence, the groups indicate the most critical action to help stabilize the individual market for 2017 and 2018 is to remove uncertainty about continued funding for cost sharing reductions (CSR). Nearly 60 percent of all individuals who purchase coverage via the marketplace – 7 million people – receive assistance to reduce deductibles, co-payments, and/or out-of-pocket limits through CSR payments. Cost-sharing reduction subsidies for certain low-income enrollees in marketplace exchange plans have been financed through payments made to insurers by the Department of Health and Human Services (HHS). These subsidies reduce out-of-pocket costs for patients who might otherwise be unable to afford health care services despite being insured.
The House of Representatives sued the Obama Administration over the way these payments were financed — without specific appropriations by Congress. A district court held that the cost sharing payments were, in fact, unconstitutional, but stayed an injunction on making the payments to avoid a collapse of the marketplace while the Administration appealed the decision. After the elections, the House successfully petitioned the appeals court to put the case on hold, arguing that significant health care policy changes were imminent, but absent significant movement on health system reform legislation the appeals court will likely move forward in coming months. Since the law requires insurers to finance these subsidies regardless of whether they receive federal payments to do so, they would face enormous financial losses and leave the market, leaving millions of Americans without insurance and likely causing disruptions throughout the system.
The letters ask policymakers to act quickly to ensure that these cost sharing reduction payments continue while broader marketplace stabilization efforts are developed.