Aetna has announced it will exit all Obamacare marketplaces in 2018, citing $700 million in losses since 2014 and leaving Nebraskans with only one insurer on the exchange. The remaining insurer, Medica, has not yet committed to selling policies on the exchange next year.
Blue Cross and Blue Shield of Nebraska, our state’s largest insurer, and UnitedHealthcare pulled out of the exchange in 2016, also citing losses in the hundreds of millions of dollars.
News outlets recently reported Nebraska Director of Insurance Bruce Ramge saying if no companies participate in the Nebraska exchange next year, it could mean people who qualify for tax credits would not get them. However, they would still have to find insurance in order to avoid Obamacare’s individual mandate penalty, which is yet another example of people being harmed through no fault of their own under this unsustainable law.
This is why we took action in the House at the beginning of May to move forward with repealing and replacing Obamacare.
Executive rulemaking created loopholes in Obamacare which allow individuals to enter and leave the insurance marketplace at any time. Coupled with the ineffectiveness of individual mandate penalties in forcing people to remain insured, premiums have continued to rise. Most Americans on the exchanges saw double-digit premium increases for 2017.
We all know people do not wait until they have an accident to obtain car insurance – this would compromise the entire risk-pooling system. The same holds true for health insurance, which is why the American Health Care Act passed by the House incentivizes people to select and maintain coverage before they need it.
Under our bill, it is illegal for anyone who remains continually insured to face any form of rate discrimination due to a preexisting condition. The bill also establishes a 63-day grace period where no one can be charged a higher rate, regardless of health status, as long as new coverage is obtained before the grace period ends.
If a policy has lapsed for more than 63 days, the individual or family returning to insurance coverage must pay a 30 percent premium penalty in the first year – and only the first year – they return to coverage. This flat penalty encourages people to stay insured while making sure those who return to the marketplace cover potential added costs in a way which does not rate them for their health conditions.
States have the option to request a waiver from certain Obamacare regulations under the American Health Care Act. Before a waiver can be granted, the state must first establish an invisible high-risk pool. This mechanism allows individuals and families to continue purchasing the same health insurance plans open to healthier consumers, but the extra costs of their health conditions are covered silently by the state-created pool to bring their premiums down to near the level of the healthier population.
Again, even if a state receives a waiver, anyone who maintains consistent insurance coverage cannot be charged more.
I firmly believe we can protect access to care for those with preexisting conditions while lowering costs for the millions of Americans currently facing premiums and deductibles they cannot afford. Passing the American Health Care Act in the House was the first step, and we will continue our work in Congress to revive the health care marketplace.