A new report from the health insurance industry alleges that the law’s taxes on health insurance plans will increase costs for consumers, adding up to “at least $73 billion in fees through 2019 and increase premiums between 2.8 and 3.7 percent in 2023.” The Hill’s Julian Pecquet pulls out additional findings:
– Affect individuals and smaller firms most of all;
– Further incentivize employers to self-insure their health benefits coverage as a means of avoiding these fees, which will further shift the burden of the fees to smaller employers and individuals who continue to purchase fully insured coverage;
– Increase costs in the Medicare Advantage and Medicare prescription drug programs that will result in increased cost-sharing and premiums for enrollees;
– Increase pressure on state budgets to address increasing costs for Medicaid managed care plans; and
– Exacerbate adverse selection in the individual and small group markets as younger, healthier individuals forgo coverage, “leading to a less stable risk pool and higher premiums.”
Republicans will certainly appropriate these talking points to argue for repeal, but it’s difficult to shed any tears for an industry that’s earning record profits and is about to benefit from tens of millions of new customers as a result of the Affordable Care Act. If anything, the appropriate response isn’t to roll back the taxes — which are necessary to finance reform and ensure that coverage expansion is fully paid for — but to strengthen the law’s regulatory provisions.
The ACA already requires insurers to spend 80 to 85 percent of their premium dollars on health care rather than administrative expenses and forces companies to justify proposed premium increases. And if the industry is now telling us that it doesn’t have the tools to control premium increases, then perhaps we need to bring back some of the cost control measures it defeated during the health reform debate. I’m looking at you, public option.