When leaders in the House of Representatives cancelled a scheduled vote on the American Health Care Act in late March, both President Trump and House Speaker Paul Ryan indicated that the issue would not be revisited by Congress “for the foreseeable future.” But now, just a few weeks later, Republicans have submitted amendments to the legislative proposal that in some ways resemble provisions contained in the Patient Protection and Affordable Care Act (PPACA). Two Republicans have proposed what are being called “invisible risk pools.” This program would provide funds to insurers to help subsidize the cost of insuring high risk, or very sick, individuals. This would function as a form of reinsurance similar to that created under PPACA.
Like PPACA’s transitional reinsurance program, the invisible risk pools would help stabilize prices in the insurance market. High risk individuals generally do not pay enough through their premiums to fund their claims. Thus, premiums rise to offset these costs, leaving everyone (including healthy individuals) paying more. Invisible risk pools would help segregate the bad risk from the good, and, ideally, keep premium inflation from spiraling out of control for everyone.
Even though the House Rules Committee adopted the proposed changes, the bill’s successful path through Congress is not automatically guaranteed. PPACA’s transitional reinsurance program has been called a slush fund for insurance companies by some commentators. In addition, several members of the Senate, including former Presidential Candidate Marco Rubio, have questioned the validity of the administration and regulation of PPACA’s transitional reinsurance program by the Department of Health and Human Services (HHS). Rubio successfully advocated for restrictions limiting the amount the government can pay to insurers under PPACA’s risk corridor program, a program similar to but distinct from the transitional reinsurance program. With so little consensus on the legislative proposal in its current form, adding this additional provision calls into question the support of some Republican Senators. President Trump will need their votes for any replacement of PPACA to pass.
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