My NPR All Things Considered Interview with Michel Martin:
MICHEL MARTIN, HOST:
We have one more conversation about healthcare. As we just heard,
health insurers are trying to figure out what to do without the
[cost sharing reduction] reimbursement from the government that the Trump administration says
will no longer be paid. The question is, will insurers raise their rates
or withdraw from the health exchanges created by the Affordable Care
Act? For perspective on this, we called Robert Laszewski. He's a former
insurance executive who's now a health policy consultant. Mr. Laszewski,
thanks so much for speaking with us.
ROBERT LASZEWSKI: You're welcome.
MARTIN: So based on your knowledge of the industry, what are the
options that insurers are considering to deal with the lack of these
LASZEWSKI: Well, actually, many of them have already raised the
rates. They had to have their 2018 rates into the regulators and
approved a couple of weeks ago, so most of them have already made some
pretty significant rate increases - between 10 and 20 percent - assuming
that Trump would cut off the subsidies. A few insurance companies and a
few regulators did not do that. They did not allow for it. I think now
what's going to have to happen is these insurance companies today are
having some pretty tense conversations with the regulators, saying, if
you want us to stay in the market, you're going to have to let us raise
those rates 10 to 20 percent.
MARTIN: Is it possible or likely that some of these companies will
just pull out? And can they do that even if they've already offered
plans for the coming year?
LASZEWSKI: It is still possible for insurance companies to pull
out. The contracts they have with the government have an out clause if
there's a major material change. So it's possible. More likely, I think
you're going to see some regulators make some accommodations and allow
for the higher rates to happen pretty quickly. I don't think we're going
to see many, if any, pull-outs. Now we've got dozens of insurance
companies involved, so I wouldn't be shocked to see one do it. But
generally speaking. The carriers have known this is coming, they know
what kind of environment they're in, and they're pretty much pricing for
MARTIN: Let's say for the sake of argument that companies do pull
out of the exchange. Is there a tipping point at which the Affordable
Care Act no longer effectively exists?
LASZEWSKI: Well, that's possible if you had substantial carriers
pull out in some of the larger markets - with any markets of any
consequence with no insurance company. But I think we're actually
entering a strange period here. The insurance companies are figuring out
how to make money in the Obamacare insurance exchanges. They just raise
the rates. So the carriers - the insurance companies - are backing into
a survivable market here. Run the rates up as high as you have to. They
can at least break even. It becomes sustainable for the insurance
company, but it's a terrible situation for people who don't get
subsidies and have to pay the full cost.
MARTIN: So finally, before we let you go, are there other options
on the table? Could Congress theoretically, anyway, pass some sort of a
patch to fund these cost savings reimbursement?
LASZEWSKI: Absolutely. The Congress could pass legislation not
only to fix the cost-sharing subsidy problem that Trump created but to
fix a lot of other problems. Obamacare has some very serious
architectural problems when it comes to the insurance exchanges. It
needs an overhaul minimally. So the Congress could fix it, but here's
the problem - Trump would veto it [a short-term patch]. So I think we're stuck in a really bizarre period right now, one
where people getting subsidies are going to be OK. Even though [Trump] cut
the funding to the insurance companies, they're going to get their
subsidies to help pay for it. But 44 percent of those in the individual
market didn't get a subsidy last year because they made too much money,
and those people are really getting hurt.
MARTIN: That's Robert Laszewski. He's a health policy consultant,
a former insurance executive. He was kind enough to speak to us by
phone just outside Washington, D.C. Mr. Laszewski, thanks so much for
speaking with us.
LASZEWSKI: You're welcome.
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