Rules proposed this week by the Trump administration to stabilize the individual health insurance market under the beleaguered Affordable Care Act are a good start, according to Daniel J. Hilferty, chief executive of Independence Blue Cross, the Philadelphia region's largest insurer.
The proposal, the first concrete step by the Trump administration to deal with the ACA, would have little effect this year, but could bolster the market in 2018 by luring more insurers back into the market, said Hilferty, whose company was the only one to offer plans in Southeastern Pennsylvania this year.
Hilferty, as board chairman of the Blue Cross Blue Shield Association, which represents companies that insure nearly one in three Americans, and as a member of the executive committee of America's Health Insurance Plans, has a significant role in shaping the health-insurance industry's efforts to influence changes to the ACA.
There was much to like about the proposal from the Centers for Medicare and Medicaid Services, Hilferty said in a Wednesday interview.
"Tightening up the process around the special enrollment periods and shortening the open enrollment period so it doesn't bleed over into the year of the program, these are all positive first steps" for 2018, he said.
Another proposed change would effectively require consumers to pay past-due premiums before they can re-enroll for insurance for the next year with the same company.
"It has been a problem for us. Folks would come on, get the service they needed, and stop paying premiums. We're still paying claims. It would bring responsibility back to the individual," Hilferty said. Independence did not provide details on the amount of bad debt attributable to this problem.
In what could be the most significant change, the proposed rules also would allow insurers to cover a smaller percentage of health-care costs. That would reduce premiums by an estimated 1 percent to 2 percent and attract more consumers to buy insurance, the Centers for Medicare and Medicaid Services said.
The Centers for Medicare and Medicaid Services recognized the likelihood that consumers would be stuck with higher out-of-pocket costs but said in its 71-page proposal that "in the longer run, providing issuers with additional flexibility could help stabilize premiums, increase issuer participation, and ultimately provide some offsetting benefit to consumers."
The Center on Budget and Policy Priorities, a liberal Washington think tank, jumped on this proposed change because it "would reduce premium tax credits for many of the 9 million consumers who receive them," forcing moderate-income families to pay more or accept weaker coverage.
Hilferty and other insurance executives also would like Congress to amend the ACA to allow them to charge older consumers up to five times more than younger consumers, up from the current limit of three times. The goal is to attract more younger, healthier people to pay into the insurance pool by charging them less than insurers are allowed to now.
"We have to shift the risk pool to a healthier risk pool," Hilferty said.
AARP called the proposal to allow insurers to charge up to five times more for older consumers an "age tax." A bill that would do that was introduced in the House of Representatives on Jan. 27.
An AARP study estimated that the change would raise average annual premiums for 60-year-olds by $3,200 and reduce them for 20- to 29-year-olds by $700.