A proposal to stabilize the Obamacare exchanges would allow people who live in counties with no insurer to buy coverage from the same place members of Congress get theirs: Through the small business exchange in Washington, D.C., created under the law.
Just like members of Congress and their staff members who live in other states, people from these “empty” counties would be able to buy coverage through the D.C. small business exchange, called SHOP. But because they don’t receive contributions from an employer to pay for coverage, the federal government would contribute toward the cost of premiums if they meet a certain income threshold.
The idea, called the Health Care Options for All Act, from Sen. Claire McCaskill, D-Mo., is somewhat similar to an often-cited proposal by Republicans, which would enable people to buy their coverage across state lines, but it’s not clear whether it would receive bipartisan support. Outside experts caution that some hurdles would need to be worked out.
For instance, the way that SHOP and the individual exchange work financially is different. Under SHOP, people receive contributions from their jobs to help them pay for coverage. Under the individual exchange, which often covers people who are self-employed, customers can receive federal subsidies to help pay for premiums and out-of-pocket medical costs. SHOP is not set up to calculate these federal subsidies, but would need to be under the McCaskill proposal.
“I think it’s creative, but there are problems,” Timothy Jost, emeritus professor at the Washington and Lee University School of Law, said of the proposal. “How do you figure out what the premium tax credit is, and how do you administer that? My impression is that it isn’t something they could do, or not something they could do without a tremendous amount of reworking the system.”
Also, insurers would go from covering a predictable customer base to adding customers who may have more costly medical needs, and having to do so on short notice because final contracts must be signed Sept. 27.
“From an actuarial point of view, you need to have a good idea of what your population is going to be like in order to set your rates,” said David Anderson, research associate of the Health Policy Evidence Hub at Duke University’s Margolis Center for Health Policy. “A national insurer can make a wild guess as to what that might look like, but they can’t make a guess if they don’t have enough time to figure out who might not be covered.”
McCaskill has been meeting with Democrats and Republicans on various healthcare solutions, according to her office. The bill is drafted so that different agencies would work together to address out the details of the proposal, her office explained, and though she requested the bill pass by unanimous consent, the request was objected to.
Not all states have shared details about how their exchanges are shaping up for next year, but 20 counties across the country, where 12,123 people live, are facing the prospect of having no insurer to buy tax-subsidized coverage from next year, according to data compiled by the Kaiser Family Foundation.
In contrast, the D.C. exchange for small businesses has four insurers to choose from, and at 60,000 customers, it has the largest enrollment of any small business exchange in the country. Because the insurers are national brands, people can use the coverage to see doctors and go to hospitals outside of D.C.
The individual exchanges in states, which are separate from SHOP and allow people to buy tax-subsidized coverage, have struggled while Republicans worked in recent months to repeal and replace portions of Obamacare. Insurers are not obligated to sell plans on the exchanges, and some have announced they would not be participating in the program next year, while others said they were proposing double-digit rate hikes on premiums. The companies have blamed various factors for the decisions, including uncertainty over whether the Trump administration would fund insurer payments under Obamacare as well as massive losses.
The exchanges faced a similar trend last year, and how to address the issue has become the center of fierce debate. Democrats have blamed Republicans for sabotaging the law, and Republicans have pointed to the outcomes to support their assertion that the law is failing under its own weight.
Senators left Washington Thursday for their August recess, vowing that when return they will change course on healthcare and work in a bipartisan way to stabilize the Obamacare exchanges. Divisions already are emerging on what the best way will be to do that, but Democrats have detailed their priorities, which would include a discussion on the McCaskill proposal.
“We should look at Claire McCaskill’s proposal for bare counties that offer real opportunities for health insurance for counties – the relatively small number of counties – all, most all rural, that are not covered,” Senate Minority Leader Chuck Schumer said on the Senate floor hours after Republicans failed to advance a healthcare bill.
Even without legislation, the number of empty counties has fluctuated as state officials have worked with insurers to fill them. In McCaskill’s home state of Missouri, for instance, health insurer Centene moved to fill empty counties, saying that the exchanges have been profitable.
“This announcement is great news for many Missourians who’ll now have more choices for health insurance,” McCaskill said in a statement at the time. “But Centene’s news continues to underscore the uncertainty in our insurance markets, something that’s just unacceptable for folks in my state. And something that my legislation, which would let Missourians who don’t have access to a local provider get the same plans that Congress gets, would go a long way to address.”
Many of the counties are unattractive to insurers because they are largely rural, but they could still be coaxed into participating by a state because they would have a monopoly on the market and could charge higher rates. In Iowa, for instance, Medica said that it would continue to sell plans in the state as the sole provider on the exchange, but requested an increase of 43.5 percent for the cost of premiums. The federal government kicks in more money toward premiums when rates increase, so most people who buy coverage through the exchanges don’t personally feel the increase. But those who make more than $48,000 a year for an individual, the cutoff under the law, will for the most part pay significantly more for premiums, and many of them will have to change plans — and likely doctors and hospitals — after they switch insurers.
Anderson said that if the counties don’t get insurers, another solution would be for the Department of Health and Human Services to temporarily enact Medicaid there, a move that has been used before for public health emergencies, such as the water crisis in Flint, Michigan.
“It could be viable for 2019, but I’m not sure how it works for 2018,” Anderson said of the McCaskill proposal.