Republicans have included a number of provisions that could cause problems for health insurers in a new proposal for replacing the Affordable Care Act.
The proposal, outlined in a 37-page document with the title “A Better Way,” could help insurers sell health coverage in multiple states, by letting states join together to form multistate health insurance regulation compacts.
A second provision could give insurers more flexibility to charge older consumers more for coverage.
A third could help insurers punish consumers who game the system by waiting until they get sick to pay for coverage. That provision would let insurers increase rates for consumers who fail to buy coverage when they are young, or who go for long periods without having coverage.
But, like earlier Republican ACA overhaul bill proposals, the new proposal would keep some ACA consumer protection provisions that have been popular with voters but expose insurers to health claim proposal.
The proposal could also limit or eliminate some of the defenses insurers have used to manage health claim risk, and it could force insurers to compete harder to hold on to enrollees.
For a look at some provisions in the proposal that might please consumers and employers but concern health insurers, read on:
Some health policy observers say the big gorillas in the health insurance market are just too big. (Photo: Thinkstock)
1. The proposal could tighten the antitrust rules that apply to health insurers.
The new proposal calls for policymakers to study the possibility of eliminating a law that gives health insurers some relief from the requirements of the McCarran-Ferguson Act.
The McCarran-Ferguson Act keeps companies from joining together to form trusts that hurt consumers.
Insurers say their limited federal antitrust exemption simply gives them the ability to work together to develop standard forms, and to pool information about their claims, so they can do a better job of projecting future losses and setting prices.
The authors of the new Republican proposal acknowledge that what eliminating the limited exemption would do is controversial, but they propose having the U.S. Government Accountability Office look into whether eliminating the federal exemption, and changing state antitrust rules, could due to the level of competition in the health insurance market.
Related: Groups Assail Antitrust Repeal
Republicans say they fear the Obama administration will try to reduce employer use of self-insured health plans by classifying stop-loss insurance as group health insurance. (Illustration: Thinkstock)
2. For employers, the proposal could make using a self-insured health plan more attractive.
The Affordable Care Act exempts employers that self-insure their health plans, rather than relying on health insurance from outside insurers, from some ACA requirements.
The sponsors of the plans have argued that they already must comply with some ACA mandates, and that they are exempted from some other ACA mandates because employers with self-insured plans have an obvious economic incentive to minimize claim costs and administrative costs.
Some employers that self-insure use stop-loss insurance, or insurance for health plans, to minimize their exposure to catastrophic health claim risk.
The authors of the new Republican proposal say some fear that federal regulators will try to discourage employers from self-insuring, and using stop-loss, by classifying group health stop-loss insurance as group health insurance.