Republicans consider adding reinsurance program to health care plan
As Congress remains in recess, some experts are weighing in on a proposed amendment to the American Health Care Act — the Republican health care replacement plan.
Two members of the Freedom Caucus want to re-establish a reinsurance — or risk sharing — program, similar to one previously in place under the Affordable Care Act, also called Obamacare. It would provide $15 billion over nine years to insurance companies to cover the care of high-cost patients, with the aim of keeping a lid on premiums and keeping the exchanges afloat.
But it just is not enough money to make a difference, Professor Tim Jost, a health policy expert at the Washington and Lee University Law School, told Patient Daily.
Uncertainty is leading other insurance companies to pull out of exchanges. Most recently, Aetna said it would withdraw from Iowa, a move that followed closely an announcement that Wellmark was doing the same.
Jost, a supporter in general terms of reinsurance programs, said those linked to Medicare Part D and a state effort in Alaska have worked well. And a more generous one under the Affordable Care Act also worked, but only for one or two years until it "fizzled out" through lack of funding.
The three-year program, aimed at keeping the market stable in the earlier years of Obamacare and which ended last year, is estimated to have delivered $20 billion to insurance companies.
For the Freedom Caucus, in exchange for supporting a reinsurance program, states would be given the choice of a waiver on federal rules on essential health benefits and on community ratings, which prevents insurers from varying premiums within geographical areas.
Rep. David Schweikert (R-AZ), one of the sponsors of the bill, believes the amendment can work to keep down premiums and protect coverage for pre-existing conditions. The amendment to establish the Federal Invisible Risk Sharing Program was co-sponsored by Rep. Gary Palmer (R-AL).
"Listening to his colleagues in Congress and constituents in Arizona, two priorities became clear to David Schweikert: Americans want affordable premiums and they do not want to be denied coverage for pre-existing conditions," Oliver Schwab, a spokesman for Schweikert, said.
He said Obamacare wasn't good for the congressman's home state, where the private market is down to a single insurer and premiums for some families have risen 116 percent.
"Many other states around the country share these unacceptable trends," Schwab told Patient Daily. "Serious lawmakers have a job to do, and David Schweikert is committed to repealing and replacing Obamacare the right way. ... The Schweikert-Palmer Amendment brings the concept of risk-sharing front-and-center to the reforms Americans want as the president and Congress repeal Obamacare and replace it with a system that works.”
The amendment has the support of House Speaker Paul Ryan, who said it “makes this a much better bill.”
“This amendment alone is real progress and it will help us build momentum toward delivering on our pledge to the country," Ryan said.
But Matt Fiedler, a fellow at the Brookings Institution Center for Health Policy, told the Washington Post if all of the subsidies were passed through to consumers, premiums would be about 1 percent lower.
Organizations in this story
Brookings Institution 1775 Massachusetts Ave NW Washington, DC 20036
Washington and Lee University 204 W Washington St Lexington, VA 24450