Two bipartisan ObamaCare fixes being pushed by GOP Sen. Susan Collins(Maine) would reduce premiums by 18 percent in 2019, according to a new study.
The study from Avalere, a consulting firm, finds that the two bills would more than cancel out the projected premium increase from repealing ObamaCare’s mandate that most individuals purchase health insurance.
Collins secured a commitment from Senate Majority Leader Mitch McConnell (R-Ky.) to support passage of the two bills before the end of the year in exchange for her vote for tax reform, which includes repeal of the ObamaCare mandate.
The two bills provide funding for payments to insurers, known as cost-sharing reductions (CSRs), and for “reinsurance,” which is money to pay for the costs of sick enrollees and bring down premiums.
Avalere finds those two proposals, with $5 billion per year in reinsurance funding, would reduce premiums by 18 percent in 2019. That is more than the 10 percent increase in premiums from repealing the mandate.
Reinsurance accounts for 4 percent and CSRs for the other 14 percent.
“From a premium point of view, we do think reinsurance and CSRs probably covers the mandate,” said Caroline Pearson, a senior vice president at Avalere.
However, Topher Spiro, vice president for health policy at the liberal Center for American Progress, said the two bills would not actually cancel out the effects of mandate repeal. He said the better comparison is to factor in the premium increase that has already occurred from CSRs being canceled, which would mean the two bills are making up for just 18 percent of a roughly 30 percent total premium increase.
There are other potential effects from repealing the ObamaCare mandate that the bipartisan proposals would not address.
For example, the instability from repealing the mandate could cause insurers to simply drop out of certain areas of the country, potentially leaving some areas with no insurers offering coverage at all.
“It’s reasonable to assume that some insurers would exit the market if the mandate was repealed,” Pearson said. “We should be worried we would have regions without any plans available.”
It is unclear whether the bipartisan ObamaCare bills can pass this month, given opposition among House conservatives.
The Congressional Budget Office estimates 4 million fewer people would have coverage in 2019 without the mandate. Avalere projects that would be only partially made up for by the two bipartisan bills, which would result in 1.3 million more people enrolling.
There is also a debate among experts about whether funding the CSR payments actually helps stability. While it would certainly lower premiums, because of a quirk in the way ObamaCare’s subsidies to help people afford coverage are calculated, some people who get subsidies would get less assistance if CSRs are funded than if they remain canceled.