If Congress repeals or stops enforcing the individual mandate and Maryland doesn’t change anything about the way its insurance market works, state residents will feel the effects quickly, health care experts warned a state commission Tuesday.
“If we don’t act next year, it’s very likely we won’t have an individual market in 2019 in Maryland,” said Deb Rivkin, Vice President of Government Affairs for Maryland at Carefirst Blue Cross Blue Shield, the state’s largest health insurer.
Rivkin sits on a state commission that is grappling with how to buffer the ramifications that would follow if Congress repeals the Affordable Care Act’s “individual mandate” requiring individuals to buy health insurance.
For now, Carefirst and Kaiser Permanente are the only providers left in Maryland’s individual market, after Cigna left and Evergreen Health liquidated earlier this year. In some parts of the state, Carefirst is the only option.
Individuals who buy their insurance for 2018 through Maryland’s exchange face premiums that are on average 33 percent higher than the premiums they paid for this year’s insurance.
Rivkin said repealing the individual mandate, as Congress is considering, would exacerbate that trend.
“The rates are going to continue to go up, especially if the individual mandate is no longer enforced,” she said. “And so you’ll have the spiral effect of the healthy not buying, so then you’ll have the sicker individuals in the individual market who are already paying prices that they cannot afford.”
The repeal of the individual mandate would also increase premiums for people who get their health insurance from their employers, said Michael Miller, policy director at Community Catalyst, a national health care advocacy group.
“Individuals are incentivized to take up their insurance coverage because of the individual mandate,” he said. “It’s the healthier individuals who are likely to abandon that coverage in the absence of the mandate.”
The loss of the healthier members of an insurance plan — however that plan was purchased — would lead to higher premiums, he said.
The commission, whose members include representatives from across the health care industry, as well as a few legislators, must submit policy recommendations to the General Assembly by the end of the month. However, it can continue meeting and working on the issue for another two years.
“I think everybody who testified and most of the commission members said that we need to be proactive and we need to act quickly,” state Sen. Brian Feldman, who co-chairs the commission, said after Tuesday’s meeting. “Because inaction has its own negative implications.”
The group is considering a series of options to buffer those effects and stabilize Maryland’s insurance market, beginning with replacing the federal individual mandate in state law.
Stan Dorn, senior fellow at the advocacy nonprofit Families USA, suggested pilot-testing a variation on the mandate and the financial penalties for not having insurance.
“When somebody files their state income tax return, they could be given the option to pay their penalty to the state and get nothing,” he said, “or to pay their penalty to an insurance company and couple with their premium tax credit and get health coverage.”
But Rivkin, at Carefirst, cautioned that this option would create problems for insurers.
To encourage more insurers to participate in the market, Miller suggested incentives, as well as tighter rules. For example, if an insurer wanted to sell plans in the small group market, it would also have to sell to individuals, or else pay a penalty.
Another option is to implement the Basic Health Program, a concept created by the Affordable Care Act that allows states to offer subsidized insurance to people just above the poverty level, a group that tends to float in and out of Medicaid eligibility, and collect the subsidies the federal government would otherwise pay to the individuals.
“The gist of it is that instead of being covered through the marketplace, people under 200 percent of poverty would be covered through state contracting plans, ideally with much lower costs to the consumer than what marketplace coverage costs,” Dorn explained.
But he warned that many of the uncertainties in Washington, such as whether the federal government will continue to pay subsidies, could make that option less viable.
The group didn’t come to any conclusions Tuesday. It plans to get independent analyses of the different options before recommending anything.
Meanwhile, open enrollment for 2018 plans on the existing insurance market ends Dec. 15.