With the Senate speeding toward a final vote on tax reform legislation, Majority Leader Mitch McConnell (R-KY) and his leadership team are considering the inclusion of two additional health care proposals. Their hope is that these proposals will persuade undecided Senators to vote yes and make up for the fact that the bill includes the misguided decision to repeal the individual mandate. Unfortunately, while these proposals may have merit on their own, they won’t be enough to mitigate the damage caused by individual mandate repeal, which the Congressional Budget Office (CBO) estimates will lead to 13 million Americans losing health coverage.
Proponents of the two proposals have claimed that they would at least mitigate – if not completely undo – the harm of individual mandate repeal. The first, from Sens. Lamar Alexander (R-TN) and Patty Murray (D-WA) would restore cost sharing reduction (CSR) payments through 2019, after the Trump administration unilaterally decided to end the payments earlier this year.
The second, from Sens. Susan Collins (R-ME) and Bill Nelson (D-FL), provides $2.5 billion in both 2018 and 2019 for state reinsurance programs, which reimburse insurers for some or all of the costs associated with highest-cost claims.
However, without the individual mandate, fewer healthy people will sign up for coverage and average costs and premiums across the individual market will rise by 10 percent, according to the CBO; some providers have projected even larger increases. To offset this 10 percent increase, $10 billion in federal reinsurance funds would be needed each year (as opposed to the temporary “solution” offered by Collins-Nelson).
Worse, repealing the individual mandate increases uncertainty and instability about future open enrollment periods, risk pool profiles, and premium rates. Put simply, insurers would be forced to reconsider whether they want to continue taking part in the health insurance marketplace at all, a recipe for further disruption and additional loss of coverage among individual market enrollees.
Finally, while the Alexander-Murray proposal to reinstate CSR payments would be a laudable approach on its own, CBO has found that it would also fail to reverse the coverage reductions that will result from individual mandate repeal. In short, repeal creates a problem far bigger than the one Alexander-Murray was initially intended to address.
With a final vote looming, now is the time to tell your Senators that they should stand with patients and reject this bill. In the absence of substantive debate and expert input, grassroots pressure is the best hope for stopping this harmful legislation once and for all.