Provider choice is down. Premiums and cost sharing are up. This is the current state of the healthcare market, Janet Trautwein, executive vice president and CEO of NAHU, on Wednesday told Congress — and it’s unsustainable, she said.

In testimony before the Senate Committee on Health, Education, Labor and Pensions, Trautwein said “immediate steps” need to be taken to stabilize the individual market.

Saying she’s heard reports that premiums are up due to carrier misestimates and they should now be stable, Trautwein emphasized that the bigger question should be why the costs were higher in the first place. “The problem is that we’ve created a system that operates under a set of rules that can be broken,” she said. “We see people who come in during open enrollment and drop out a few months later after they get the services they need, and maintain coverage only during their period of illness.”

The HELP committee hearing titled, “Obamacare Emergency: Stabilizing the Individual Health Insurance Market,” also included testimony from Tennessee insurance commissioner Julie Mix McPeak, and Marilyn Tavenner, president and CEO of insurance company trade organization America’s Health Insurance Plans.

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Committee Chairman Sen. Lamar Alexander (R-Tenn.), prefaced the hearing by asking that the panel answer three general questions in their testimonies:

1) Is there trouble in the individual market?

2) What needs to be done by Congress?

3) When does action need to take place?

To answer Alexander’s question about what needs to be done, Trautwein said reinsurance programs and cost sharing subsides scheduled to run through 2017 should continue in order to maintain market stabilization and regulatory action. This, she said, would be regardless of any other legislative action put forth by Congress, as it would assist with problem areas such as special enrollment periods.

Trautwein also suggested changes to the type of plans offered, “such as not requiring standardized plan offerings and allowing flexibility for grandmothered and grandfathered plans,” she said. “Redefining the formula for the medical loss ratio could provide important relief for consumers — and compensation relief for brokers who help them get covered.”

Trautwein, Mix McPeak and Tavenner all agreed that Congress needs to act by March to ensure states have the time to file policy forms in May, submit rates by July and be approved by August. “Right now, plans are trying to price for 2018 and the uncertainty around cost sharing subsides and the tax credits would cause them to hesitate to price because we need understanding of what the funding support is going to be because that affects premiums,” Tavenner said.

What should Congress do first?
Sen. Todd Young (R-Ind.) asked the panelists what Congress should do first to help address the dynamic of unaffordable coverage. Trautwein went after healthcare costs.

“You need to figure out why cost sharing is so high,” she said.

Answering her own question, she reiterated that premiums are so high because of adverse selection in the market. “[W]e’ve got to look at why these premiums have risen like that, why people don’t continuously stay covered, why they go in and out and why special enrollments are working the way they are.”

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