There is nothing that unsettles insurance providers more than uncertainty over what it is they’re insuring. And that, principally, is what lies behind the stunning premium hikes being sought by insurance companies locally, as well as nationally.
On the home front, some bad news landed this week. Hawaii Medical Service Association subscribers covered through the Affordable Care Act (“Obamacare”) would pay 27.1 percent more next year, if the federal Centers for Medicare and Medicaid Services approves.
Similarly, Kaiser Permanente, which also sells coverage through the ACA’s HealthCare.gov online exchange, wants a 19.9 percent rate hike.
Because of the state’s longstanding employer mandate to provide coverage for workers, relatively few Hawaii residents — 33,000 — access coverage through the exchanges, compared with other states; beyond the individual market, only Kaiser is selling policies through the business marketplace on the federal exchange.
Still, that is not an insignificant number to be putting up with the mounting instability of the marketplace. Continuing to unsettle things in this way is sure to spill over and push premiums skyward for the general insured class in Hawaii, where the cost of living is already hard to manage.
A solution must be found, urgently. This is why Congress should expedite bipartisan efforts to draft modest fixes that could help stabilize the markets.
In the U.S. Senate, where the GOP back-door campaign to repeal and replace Obamacare to varying degrees suddenly imploded last week, the committee overseeing that subject is trying to return to “regular order” — generating and discussing proposals more openly.
Likewise, a bipartisan group in the House, known as the Problem Solvers Caucus, has come up with compromise proposals to calm the waters in the health care industry, roiled by the months of partisan rancor over the ACA.
At the top of the lists in both chambers are plans to fund and ensure “cost-sharing reduction” payments to insurers, federal subsidies authorized by the ACA but snagged by litigation.
Further, the administration of President Donald Trump has not provided any assurance that the funding would be maintained. These payments are intended to help insurers in areas bearing an imbalanced load of older, sicker patients over younger, healthier subscribers, driving up costs.
A lack of surety that the help promised by the ACA is coming through has roiled the markets, a primary reason why such high premium increases are being pursued.
In Hawaii, insurance companies place the blame for the current instability on policies of both Trump and former President Barack Obama. And it is true that Obamacare has built-in insufficiencies that have driven costs up.
For example, the individual mandate, the part of the law meant to bring everyone into the insurance pool and balance out costs, has not worked as intended. Those who fail to meet the mandate and get insured are assessed a tax penalty that is too low. Many of the sought-after younger, healthy customers take a pass on insurance and just pay the penalty.
But the most potent, continuing threat to the affordability of health care is the lack of confidence in financial support, and the president’s suggestion that the law be allowed to “implode” is fueling that worry.
Trump should work with Congress to calm the waters. There’s the political incentive: Many of the most threatened markets are in rural areas, home to many of his avid supporters.
The best reason for cooperation, however, is that everyone elected to serve in Washington was sent there to help people.
Hawaii Insurance Commissioner Gordon Ito predicted annual health-care cost increases of 6 to 9 percent. It’s not sustainable, he said rightly — and surely not helpful, by any stretch of the imagination.
