“With better policy choices, states can make coverage cheaper and more attractive for consumers and coax insurers back into the market, and the stability fund is a powerful tool.”
WASHINGTON, DC – As the House gears up to vote on landmark legislation that would repeal Obamacare and replace it with a patient-centered, 21st century health care system, The Wall Street Journal highlights a critical provision within the GOP plan: The Patient and State Stability Fund. It’s no secret that Obamacare has experienced a death spiral, and its individual insurance market is largely to blame.
The good news, however, is that the American Health Care Act (AHCA) presents us with a #BetterWay. The creation of the Patient and State Stability Fund will help repair state markets damaged by Obamacare. It will lower patient costs, stabilize markets, and provide states with greater flexibility– allowing each to use the funds to cut out-of-pocket costs for patients and families.
The House plan will help lower the cost of care for some of our nation’s most vulnerable, and the Patient and State Stability Fund helps ensure that. Read more below.
March 21, 2017
By WSJ Editorial Board
The biggest gamble in the House health-care bill is whether it includes enough reform to arrest the current death spiral in the individual insurance market. No one knows for sure, but critics are overlooking important provisions that will help people who are now exposed to ObamaCare’s rapidly rising premiums.
Notably, the bill includes a new 10-year $100 billion “stability fund” that allows states to start to repair their individual insurance markets. Before ObamaCare, it wasn’t inevitable that costs would increase by 25% on average this year, or that nearly a third of U.S. counties would become single-insurer monopolies. With better policy choices, states can make coverage cheaper and more attractive for consumers and coax insurers back into the market, and the stability fund is a powerful tool.
Governors could draw on the stability fund, for instance, to reestablish the high-risk pools that prevailed in 35 states before ObamaCare. The Affordable Care Act uses regulatory mispricing to force the young to make a transfer to the old, and the healthy to the sick. The result has been insurance that the young and healthy don’t want to buy or can’t afford.
Risk pools can mitigate this cycle by removing the people with the highest costs. Over time, they can generate a compounding effect with stable or even falling premiums, which begets growing enrollment, which begets more insurer participation. …
States could also decide to use the stability fund to supplement premiums and out-of-pocket costs to help people with lower incomes or chronic conditions. Or they could target the heroin and fentanyl crisis. Death rates from opiod overdoses now exceed those from HIV/AIDS at the height of the epidemic in the 1990s.
The larger goal is to start to restore the traditional state regulatory authority over heath insurance that ObamaCare supplanted for federal control. Local governments understand local needs best. With more flexibility, autonomy and accountability, the GOP hope is that reform Governors can pry open markets and help promote a larger and more dynamic business. …
Republicans have an obligation to try to revitalize insurance markets, and not only because Americans depend on coverage. Repealing and replacing ObamaCare is also an opportunity to show that conservative ideas can work in health care. The reason the opposition is so furious is that liberals fear they might succeed.
To read the full column online, click here.