4 Approaches to Lower Premiums and Stabilize Health Insurance

The Senate Health, Education, Labor and Pensions Committee have just began hearings on how to stabilize markets in the short term. This has caused a reaction among the business world as a paper has come out to set a blueprint for making insurance more affordable for more people while working within the current health law’s structure.

The paper provides a new analysis that was released by the consulting firm Oliver Wyman, it possibly boost insurance coverage and lower premiums to stabilize the Affordable Care Act insurance markets.
The goal of this paper is to increase enrollment by an estimated two million individuals, reduce average premiums by more than 20 percent and be roughly revenue neutral.

The following are the four approaches listed within the analysis that will are expected to stabilize Obamacare.

1. Fund the cost-sharing reduction payments for the long term
By reducing the amount of payments by the government to insurance companies as reimbursement for discount on copayments and deductibles, there would be a more balanced system. Currently, President Trump wants to end the payment completely (which is considered to be unlawful) while lawmakers want Congress to fund the payments until next year.

2. Create a reinsurance program
Under Obamacare; there is only a temporary reinsurance program that would protect insurance companies from huge losses. The Better Care Reconciliation Act was a reinsurance program that failed earlier this summer. But according to the analysis, it is essential to find some sort of reinsurance to make sure the cost of loss does not result in higher rates for all.

3. Strongly enforce the individual mandate
Although President Trump does not want to continue the mandate that calls for every individual to have insurance, it is very much needed. The study by Oliver Wyman came to the conclusion that if younger and healthier people opt out of the market, the cost of coverage would increase and market-average premiums would increase in parallel.

4. Get rid of the health insurance tax
From 2014 through 2016, a moratorium has been passed on the health insurance tax brought on by Obamacare. The health insurance tax was put in place to help offset the costs of federal subsidies that help people buy policies on the ACA markets. Insurance companies are lobbying to ensure that the tax on health insurance companies do not return next year. Even the analysis shows that by continuing the moratorium premiums would be cut by about 3 percent next year.

It is only a matter of time until open enrollment starts. Cosmo Insurance Agency is the in-state health insurance broker you need to help you gain stability in these confusing times. Our office in Lakewood, NJ is open from Monday-Friday from 9 AM to 5 PM.  Be sure to call as soon as possible so that you can get the coverage you need.

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