Marilyn Tavenner, CEO of America's Health Insurance Plans
Insurers have much to like in the American Health Care Act, but according to the industry's largest advocate, they also have much to worry about.
On the plus side, insurers get a huge tax break because the bill would repeal the health insurer tax, which represents a tax cut of $145 billion over a decade, according to an analysis by the Joint Committee on Taxation, published in The Washington Post.
The health insurance tax helped drive up the cost for consumers, said Marilyn Tavenner, CEO of America's Health Insurance Plans, in a March 8 letter to the chairmen of the House committees on Ways and Means and Energy and Commerce.
Health insurance top executives also get a tax break in a provision approved by the House Ways and Means Health Subcommittee Thursday morning, in a doubling of the amount of executive compensation that is deductible, to bring that cap in line with that of other industries.
Insurers will also be able to go back to a pre-Affordable Care Act era in charging senior citizens more for their health plan premiums.
Tavenner said insurers support a tax credit formula that factors in both age and income, including age bands based on a 5:1 ratio and the provision for higher income individuals to contribute more.
AHIP also supports a provision that costs insurers money --guaranteeing coverage for people with preexisting conditions -- as long as it's coupled with incentives for consumers to keep continuous coverage, she said.
The GOP plan imposes a 30 percent premium penalty for those who let coverage lapse. However, individuals no longer have a mandate to get insurance.
"Given the proposed changes to immediately eliminate the penalties associated with the individual coverage requirement would add to short-term instability in the market, we support moving up the timetable to establish additional risk pool funding as soon as 2017," Tavenner said.
Among the biggest concerns for insurers is stabilizing the individual market and ACA marketplace as health insurance transitions under a new Republican plan.
"As we have previously stated, the individual market faced challenges in the past, and it has significant challenges for 2018," Tavenner said. "The proposed legislation includes a number of positive steps to help stabilize the market and create a bridge to a reformed market during the 2018 and 2019 transition period."
These include continuing premium tax credits through the transition; funding for states to help stabilize risk pools; and more flexibility for states and health plans to offer consumers more choices.
The individual market and Medicaid are closely related, given the populations they serve, Tavenner said.
The GOP plan eliminates funding for Medicaid expansion by 2020.
Medicaid health plans provide coverage to more than 70 percent of all Medicaid beneficiaries.
"The Medicaid managed care market is also highly competitive," Tavenner said. "We are concerned that key components of the proposed new funding formulas starting in 2020 – such as the base year selection and annual increases tied to the consumer price index for medical care – could result in unnecessary disruptions in the coverage and care beneficiaries depend on."
Federal funding for Medicaid coverage is important for beneficiaries to access behavioral health services and treatment for opioid use disorders, according to Tavenner.
At the same time, AHIP members are committed to reducing cost growth by using value-based care arrangements and other innovative programs to address chronic illnesses and better manage the care of the highest-need patients, she said.
The GOP plan does not address the employer-sponsored and Medicare markets.
AHIP wants to work with Congress as it considers long-term, structural changes to healthcare, including to the individual and Medicaid markets, she said.
"As we consider long-term, structural changes, a stable market requires a good mix of all consumers to participate," Tavenner said. "We have stated previously that there is no question that younger adults are under-represented in the individual market. Recalibrating and reforming the way in which the premium assistance is structured will encourage younger Americans to get covered."