Rising Insurance Premiums Boost Talk of Changes to Affordable Care Act

Insurer defections and rising premiums in the individual insurance market are spurring Democrats and Republicans alike to talk about changes to the 2010 Affordable Care Act.

For now, the conversations are largely aimed at their party’s base. President Barack Obama led his party’s cry on Thursday with suggestions that would further entrench the law, including the addition of a government-run health plan in parts of the country with limited competition. GOP lawmakers have continued to call for gutting the law, including proposals to waive its penalties for people who forgo coverage in areas with limited insurance options.

In each of these proposals, both sides have been largely talking past one another. Come January, they will have to talk to each other instead.

Next year, a new president and Congress will be under pressure to ensure that people who buy coverage on their own still have access to viable plans.

Much of the pressure will come from insurers, who say that without changes, they will have no choice but to pull products and raise prices still more, further deterring healthy enrollees and ensuring the situation becomes irreversible. They say there is no time to lose; they are about to set premiums for the enrollment period that begins a year from now.

“In less than six months we have to turn around and prepare strategies for 2018,” saidAlissa Fox, the top lobbyist for the Blue Cross Blue Shield Association that represents the plans that dominate the individual insurance market in most states. “The sooner we get these changes which we’ve been urging all year long the sooner we’ll get on a better track for the future.”

Ms. Fox’s association wants tighter rules for who can sign up for coverage outside of the main open enrollment window, to effectively exclude anyone who was uninsured and is signing up because they have suddenly become ill. It is also lobbying for limits on health providers signing up people for private insurance, for which they pay the premium, to maximize reimbursement for costly procedures.

Those ideas won’t have to fight GOP opposition—they were included in a package of bills drafted earlier this year by Republican legislators on the House Energy and Commerce Committee.

Several other ideas could also plausibly win over a cross-section of GOP and Democratic lawmakers. Congress is expected to be closely divided next year regardless of who wins control of the House and Senate.

One option backed by Joel Ario, a former Obama administration health official, would extend the health law’s three-year reinsurance program, which ends this year, in which fees are collected from employer and union plans, as well as insurance companies, and redistributed to insurers with heavy costs to cushion the blows that trigger premium increases.

A state version of the program has already been created by Republican and Democratic Alaskan state legislators in response to a particularly acute crisis in their market. Minnesota state legislators, due to discuss what to do in their market once the election has concluded, are considering one too.

“Some form of reinsurance is, I think, important to continue,” said Mr. Ario, now a managing director with Manatt Health Solutions.

Liberal backers of the health law have called for bigger tax credits, available to more people, which could help them buy into the insurance pools and stabilize them.

Mr. Obama on Thursday indicated he was especially interested in boosting tax credits for younger enrollees to sign up, an idea that insurers have also been pushing.

Because tax credits are pegged to the cost of coverage, and older people can be charged three times more than younger people, many 20- and 30-somethings don’t get subsidies but still say they can’t squeeze premiums into their budgets.

Conservative thinkers have a counterproposal, also backed by insurers, which could find its way into a bargain: allowing premiums for older people to be five or six times more than those charged to younger people

“If you’re a Democrat and care about getting everyone health insurance, this is not some ideological hill to die on,” said Avik Roy, who advised GOP Sen. Marco Rubio of Florida in his presidential campaign and has since started his own think-tank.

Mr. Roy said that he and other Republicans would be willing to accept changes to the health law as an alternative to scrapping it entirely.

“What matters is the end result,” he said. “To me you could repeal the ACA and replace it with a better situation; you could also lose large chunks of the ACA and get to a better place than we are at today.”

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