Larry Levitt is senior vice president for health reform at the Kaiser Family Foundation. Contributed photo
With President Donald Trump's administration aiming hard against the so-called "three Rs" of the Affordable Care Act -- risk adjustment, reinsurance and risk corridors -- most Tennesseans don't seem to know about those three provisions, including the fact that only one remains.
"Sorry to complicate your story, but two of the Rs – reinsurance and risk corridors – are already gone," Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation, said during a Tennessee Business Daily email interview. "They were designed to last only for three years, 2014-2016. So, the only remaining 'R' is risk adjustment."
Since its passage, ACA has been variously attacked and bolstered by lawmakers and business interests.
"Reinsurance and risk corridors were designed to be temporary to help cushion the big uncertainty insurers faced as people with pre-existing conditions were guaranteed access to insurance under the ACA," Levitt said. "There have been some bipartisan efforts to reinstate reinsurance to help bring down premiums, but nothing has passed yet."
Meanwhile, risk adjustment isn't going anyway.
"Risk adjustment is a permanent part of the ACA," Levitt said. "Its intent is to mitigate any financial incentive insurers might have to attract healthy people and avoid those who are sick. Insurers that end up with a healthier than average pool of enrollees pay into the risk adjustment program, while those that get sicker enrollees get payments from the program."
Despite its seeming permanence, President Donald Trump's administration has been gunning for the ACA. This month, the Trump administration announced it would temporarily halt billions of dollars in ACA payments, yet last week the administration backed away from when payments quietly were resumed. Meanwhile, health insurers are bolstering marketing and presence in their areas of influence across the nation to sell more coverage under the ACA, despite the Trump administration's continued promises to destroy Obamacare.
It can all be very confusing.
Levitt was unable to comment about how Tennessee has fared, for better or worse, under the ACA but officials and health care advocates in the state have not been quiet. In March of last year, Tennesee Hospital Association President and CEO Craig Becker voiced "serious concerns" about the doomed Republican health- care proposal then under consideration. Last summer, Tennessee Insurance Commissioner Julie Mix McPeak used her testimony during a Congressional hearing to try to pressure federal lawmakers for bipartisan support of the ACA.
This past spring, Mandy Pellegrin, policy director of The Sycamore Institute, predicted that Obamacare premiums might stabilize next year because, unlike previous years, prices in Tennessee plans are no longer set too low and that elements of uncertainty that drove rate hikes before no longer apply. However, Pellegrin warned that federal policy changes may negatively affect 2019 premiums.
In particular, Pellegrin pointed to three federal policy changes that could affect Obamacare plan prices.
"Congress repealed the penalty for the individual mandate as part of tax reform legislation in December 2017," Pellegrin said in her May 17 piece on The Sycamore Institute website. "As a result, some (primarily young and healthy) people who would have otherwise bought Obamacare plans may choose not to do so. The Trump administration scaled back the 2018 open enrollment period and reduced funding for marketing. It’s not clear what effect this had or will have on enrollment, which was relatively flat in Tennessee for 2018. The Trump administration recently announced new rules to allow more access to plans that don’t meet ACA requirements. The effect of that change in Tennessee may be minimal, however, because such plans are already available here through the Farm Bureau."
Despite the uncertainty, risk adjustment provisions of the ACA seem solid enough, in large part because of the protection is affords insurers, Levitt said.
"Ending the risk adjustment program would make it very difficult for certain insurers that attract a sicker than average pool of enrollees to survive in the individual insurance market," he said. "These include, for example, plans with broader networks of doctors and hospitals. The ACA prohibits insurers from denying coverage to people with pre-existing conditions and requires all plans to cover similar benefits. But, insurers might look for subtle ways to discourage sick people from signing up, like narrowing their provider networks or drug formularies."