Employers brace for 2019 healthcare rate hikes

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Employers and individuals alike are bracing for steep hikes in 2019 health insurance premiums after Congress missed what many considered to be a last-ditch chance to stabilize the marketplace.

At issue is the $1.3 billion omnibus spending plan passed last week, which employer and business groups had hoped to use to mitigate fallout from Congressional repeal earlier this year of the Affordable Care Act’s requirement that all individuals carry health insurance.

The repeal of that provision, as well as President Trump’s elimination of federal reimbursements for discounts to cover out-of-pocket expenses for low-income policyholders, are widely expected to create chaos across for group and individual plans alike — including by increasing premiums by as much as 30%.

“Destabilization increases uncompensated care, resulting in cost-shifting from healthcare providers to large employer payers,” Ilyse Schuman, senior vice president of health policy for the American Benefits Council, said earlier this month.

The American Benefits Council was among a coalition of business, insurance and benefit groups that had been trying to mitigate the damage by pushing Congress to pass proposals that would establish a premium reduction, or reinsurance, program to help insurance companies cover the costs of high-risk patients and to provide funding for the cost-sharing reduction benefits cut by Trump last year.

But the spending bill was passed and signed into law without either last week. The $30 billion market stabilization package that was originally included in the spending bill — which included appropriations for cost-sharing reduction subsidies, federal money for state reinsurance programs and additional state flexibility under ACA Section 1332 waivers — fell apart over abortion provisions Democrats did not want included in the bill and the fact that Republicans did not want to prop up the ACA.

Failure to include that stabilization package will hit employers hard, experts say. With insurance companies about to begin filing their premium rates for 2019, industry groups said in a letter to Congressional leaders last week that “without Congressional action now, the plans offered to Americans will be nearly 30% more expensive than they would be otherwise.”

See also: Omnibus spending bill leaves out health, retirement provisions

By contrast, the letter signed by ABC, America’s Health Insurance Plans, American Academy of Family Physicians, American Hospital Association, American Medical Association, Blue Cross Blue Shield Association, Federation of American Hospitals and the U.S. Chamber of Commerce, cited an independent analysis that estimated enactment of the provisions could have lowered premiums by 21% in 2019 and expanded coverage to more than 1.5 million Americans.

In a statement, Americas Health Insurance Plans said it was “disappointed that Congress was unable to take this opportunity to help reduce premiums for hardworking Americans.”

The group vowed, however, to “continue to work with state leaders, Congress and the administration to ensure that every American has affordable choices for 2019 and beyond.”

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