Stabilizing the Individual Insurance Market: What Happened and What Next?

In August 2017, members of the Bipartisan Policy Center’s Future of Health Care initiative proposed a two-stage approach to health care reform that would first stabilize the individual health insurance market and then work expeditiously to address the more fundamental structural challenges in America’s current health care system. Since that release, there have been significant changes in both the political landscape and in the individual insurance markets.

Since the release of the expert panel recommendations, the Trump administration announced that the government would no longer make cost-sharing reduction (CSR) subsidy payments to insurers unless Congress provided an explicit appropriation for CSR subsidy payments. Congress repealed tax penalties that are assessed against individuals who fail to comply with the Affordable Care Act’s (ACA’s) “individual mandate” coverage requirement, as a part of the Tax Cuts and Jobs Act of 2017. In the recent insurance open enrollment period, several new trends have emerged, including higher premiums being “loaded” onto “silver-level” plans. This “silver loading” resulted larger premium tax credits for consumers, as well as more availability of zero-premium and low-cost “bronze-level” plans. This paper reexamines how to address the short-term objective of stabilizing the individual insurance market in light of these major changes. This issue brief provides background on what has happened since September 2017, followed by policy options.

This issue brief provides background on what has happened since September 2017, followed by policy options.

BPC’s Future of Health Care leaders have examined a series of policy options, recognizing that there is much more to be done. More sweeping changes have been supported by Democrats and Republicans alike. The proposals listed below are intentionally limited in scope and are intended to address problems in the near term. This spring, insurers will be making decisions about individual market participation for 2019 and submitting proposed 2019 premium rates for review by state regulators. Given this timeframe, action is needed now to impact premiums and market competition in the individual market for 2019.