The Future of Health Reform: The individual marketFebruary 13, 2017
If there’s one thing that is certain when it comes to health reform, it is that there is a lot of uncertainty.
To get some perspective on what the future of health reform within the individual marketplace might look like, we sat down with Scott Keefer, vice president of public affairs at Blue Cross.
What kind of implications will the recent election have for health insurance?
Long before the election, we knew the law was going to have to change in some fundamental ways. The outcome of the election just means that those changes will look different than we may have expected. That’s true both in Minnesota and at the national level.
In the end, it all comes down to extending health care coverage in a sustainable way. It’s just a matter of how we get there. Changes should be designed to stabilize the system, while maintaining the important gains that we’ve seen with greater access to coverage. That’s our measuring stick.
What factors are driving the cost of individual market premiums?
The prices are really a symptom of the high cost of health care and several underlying issues. First of all, it clearly is not sustainable to have significant increases each year. And, understandably, it’s been giving people a lot of shock.
Looking back, premium prices were simply too low when the new market launched in 2014. The gap between premiums and costs was so great because the pool of members in the individual market was small compared to the number of high-cost cases within that pool. The market has been adjusting to the needs of its members ever since, which is why we’ve had such significant premium increases.
Now, let’s look at today. The real issue that we’re currently facing is the shock that consumers have seen year over year. Health insurance is expensive because health care is expensive. So, individual insurance in Minnesota is now comparable to what most employer plans cost as highlighted by a number of studies.
This is, of course, a difficult reality for those who need to purchase coverage on their own. As we work through this period of reform, we are doing everything we can to keep costs as affordable and stable as possible going forward.
How can the health insurance marketplace stabilize itself?
Well, it won’t stabilize if we do nothing. To achieve stability, we need to focus on the immediate, short-term and long-term needs.
Immediate: For starters, giving financial relief to Minnesotans who buy insurance on their own was the top priority of the Minnesota legislature at the start of the 2017 session. This will provide some much needed help for those who might have been considering dropping coverage due to cost pressures.
Short Term: From there, stability requires more certainty that everyone who enrolls in a health insurance plan stays covered without any gaps from month to month or year to year. Not having this structure is like saying someone could buy auto insurance after they were in a fender bender, cancel it after they’ve paid their bill, then buy it again when they think they’ll need it. This is happening in our state, and is driving up costs considerably.
Long Term: We need to find a way to spread out that risk more broadly. Incentives are important in thinking about comparisons between individuals buying on their own versus through employers. Right now five percent of the entire health insurance market is shouldering a large burden.
Fixes could occur in a number of ways. There’s no silver bullet, meaning that a number of fixes are important. A reinsurance or high risk pool program could spread the cost more broadly. If this is coupled with efforts to limit gaps in insurance coverage, it could lead to a pool that is in greater balance.
What is Blue Cross doing to help stabilize the marketplace?
There’s no doubt that the marketplace as it stands is unsatisfactory. We knew this before the election and have long been committed to making the needed changes.
Right now, we are exploring new individual market products for 2018 but need certainty on the future of the Affordable Care Act. We’re also taking part in the important conversations about how we can get to a more stable market in Minnesota. We are strongly committed to making sure that the coming changes do not cause any harm to members and limit market disruption. We want to allow enough time for an effective transition for both businesses and consumers.
We will continue to work with other health care organizations, stakeholders, and elected officials to achieve these goals. A solution will come by all of us working together to make the needed changes based on what we know today.
About Scott Keefer
As vice president of public affairs, Scott Keefer represents Blue Cross as Minnesota’s health care leader with key stakeholder groups, including members, employees, community and civic groups, regulators and as a media spokesperson. He also leads the coordination of all state and federal advocacy and policy initiatives.
About the Future of Health Reform series
The Future of Health Reform is an ongoing series focused on the many changes taking place throughout the health insurance industry. Through this series, Blue Cross looks at various policy issues that are rapidly shaping the transformation of health care across Minnesota and the nation.