3 ACA individual health market survival ideas

If Congress and federal agencies want to keep the tough Affordable Care Act restrictions on individual health insurance medical underwriting alive, they need to do more to get young, healthy people to pay for health insurance.

Witnesses gave that message today in Washington, at a hearing on rising individual health insurance premiums organized by the House Oversight and Government Reform.

The Republican leaders of the committee noted in the hearing background materials that individual health premiums appear to be on track to rise sharply in 2017, and that five major health insurers have reported losing hundreds of millions of dollars on sales of ACA public health insurance exchange products.

Related: House Democrat tears into HealthCare.gov chief

Drafters of the ACA created the public exchange system, a premium subsidy tax credit system, and new tax penalties on the uninsured and underinsured in an effort to support an almost-total ban on medical underwriting in the individual major medical market.

Issuers of new individual major medical coverage cannot take health factors other than age and location into effect when pricing coverage, and they cannot use factors other than age, location and tobacco use when pricing coverage.

In the past, many state efforts to impose bans or near bans on medical underwriting failed when the youngest, healthiest people either refused to buy any health coverage or found ways to get cheaper coverage outside the main, “community rated” market.

Related: Milliman Analyzes Effects Of Coverage Access Initiatives

Al Redmer Jr., Maryland’s insurance commissioner, who testified on behalf of the Kansas City, Missouri-based National Association of Insurance Commissioners, said one of the factors leading to turmoil in the individual health market has been a combination of lack of information about how the ACA-shaped market would work and rigid rate filing deadlines.

Even when insurers set their 2016 rates, they had only a little information about how the ACA market really worked, Redmer said.

“Insurance hates uncertainty,” Redmer said.

Federal regulators have aggravated that uncertainty by rolling out big, major new ACA regulations, and revisions of ACA regulations, several times a year, Redmer said.

Chris Carlson, an Oliver Wyman actuary who represented the Washington,D.C.-based America’s Health Insurance Plans at the hearing, and Kurt Giesa, an Oliver Wyman actuary who represented the Chicago-based Blue Cross and Blue Shield Association, talked about many of the same ideas their groups of been promoting for years.

They emphasized the need for insurance regulators and exchange managers to strengthen and enforce existing individual major medical eligibility standards, such as a requirement that most people sign up for major medical coverage from Nov. 1 through Jan. 31.

Related: New exchange screening rules slash sales

Carlson and Giesa also recommended repealing the ACA insurer fee, which is supposed to raise billions of dollars in revenue from insurers, and letting insurers widen the gap between they rates they charge the oldest enrollees and the rates they charge the youngest. Because insurers now keep rates for older enrollees artificially low, the rates for the younger enrollees are artificially high, and that chases away younger consumers, the witnesses said, according to the written versions of their testimony.

Witnesses also talked about some less widely discussed ideas.

For a look at some of the other more offbeat ideas given in the written testimony, read on:

The Blue Cross and Blue Shield Association would like to give enrollees an incentive to stay enrolled. (Image: Thinkstock)