Health Insurers Push For Change to Obamacare
By: Elise Viebeck (The Hill) June 2014
Health insurance companies are urging lawmakers to widen the availability of cheap, bare-bones coverage under ObamaCare that they say could entice more consumers to enter the marketplaces.
The so-called catastrophic plans are at the center of a new proposal from America’s Health Insurance Plans (AHIP), the main trade group for the health insurance industry.
AHIP said Wednesday that creating a cheaper tier of coverage on the exchanges that is available to everyone would “further the public policy goal of affordability.”
“We intend to work with all stakeholders to provide consumers with greater peace of mind in the new marketplace,” AHIP President and CEO Karen Ignagni said in a statement.
Under the group’s proposal, the Affordable Care Act would allow consumers to purchase a health plan with an actuarial value slightly lower than the current lowest “bronze” tier of coverage.
The policies would comply with other rules under ObamaCare, such as the minimum benefit standards and the requirement for free preventive care, but would likely be cheaper than the exchanges’ current options.
The proposal highlights insurers’ desire to bring in new consumers to the ObamaCare marketplaces, some of whom might have decided coverage was too expensive.
The change would allow catastrophic plans to receive federal subsidies under the healthcare law, making them even cheaper for consumers.
Catastrophic plans are now only available to young adults and people whose plans were cancelled by the healthcare law.
The plans are opposed by consumer groups, who say the plans’ high deductibles are not well understood by policyholders and can create financial hardship.
A total of 125,585 people signed up for catastrophic coverage on the exchanges this year, or 2 percent of ObamaCare’s overall enrollment total. Eighty-three percent of the group was young adults ages 18 to 34, the most prized consumer demographic for insurers.
The proportion hints at why the industry is interested in widening access to the bare-bones plans.
It is unclear how much AHIP’s proposal would cost the federal government, though it could raise the cost of ObamaCare for the government by extending subsidies to more consumers.
AHIP also proposed new measures to help people transitioning between plans who have a serious illness or are pregnant, proposing 30-day transition periods of uninterrupted care.
The group also endorsed a series of measures to promote transparency about which doctors and medications are covered by individual health plans.
