Blue Cross Blue Shield Association proposes health insurance improvements

The Blue Cross Blue Shield Association (BCBSA) published three proposals that would lower premiums by one-third for Obamacare insurance coverage and expand access to coverage for more than 4 million additional people.

BCBSA is a federation of 36 independent, community-based and locally operated Blue Cross and Blue Shield companies. The proposal would boost federal financial assistance to enable more people to qualify. It takes aim at the individual market that was created by the Affordable Care Act and covers more than 14 million people with comprehensive coverage.

The association stated its proposals are aimed at increasing access to comprehensive healthcare coverage and making it more affordable.

“We believe everyone should have access to coverage and care, no matter who you are or where you live,” Scott Serota, president and CEO of BCBSA, said in a statement. “The individual market is a critical source of coverage for people from all walks of life, and it should be strengthened to make coverage more affordable while protecting those with pre-existing conditions.” 

Adjust federal assistance

The ACA made healthcare insurance on the individual market more affordable for individuals and families at certain income levels. To increase the affordability for more people, Congress should adjust tax credits to give more financial assistance to older consumers, according to BCBSA.

The current tax system provides indirect assistance to those with employer-sponsored coverage if their income is more than 400 percent of the federal poverty line. However, that may not be enough assistance for many dealing with the rising costs of healthcare.

“The existing tax credit structure should be adjusted so that no one purchasing coverage in the individual market would be required to pay more than 12 percent of income for health insurance,” the proposal reads.

Removing barriers

In addition to making insurance more affordable with more financial assistance, Congress should establish sustained federal funding to address those with the most serious medical needs. Addressing the costliest population would have a significant impact on overall healthcare costs. Just 5 percent of people who buy insurance in the individual market represent nearly 60 percent of healthcare claims’ costs.

A fund for states to draw on to cover the costs of this population could “make premiums more affordable for everyone, especially those who do not qualify for a tax credit,” the proposal reads. Specifically, the premium affordability program should support the cost of care for those with medical claims in excess of $65,000. BCBSA estimates such a program would bring down premiums by 15 percent and cost the federal government less than $3 billion.

BCBSA also proposed eliminating the health insurance tax (HIT), which is slated to return in 2020, to reduce premiums 2 percent to 3 percent. In addition, Congress should eliminate cost barriers for health plans linked to health savings accounts (HSAs) by making preventive care cheaper and more accessible.

Improve insurance outreach

To ensure that more people are insured, healthcare exchanges should also provide extended outreach, according to BCBSA. Reducing user fees for issuers on exchanges and redirecting fees to outreach, education and marketing could boost enrollment.

Providing more information on coverage status to states will also improve outreach efforts and simplify enrollment. Giving states more information on income status and health insurance enrollment will help determine who could be eligible for government assistance in subsidized, qualified health plans, Medicaid and CHIP programs, and provide opportunities for targeted outreach and education campaigns.

Another simplification to the enrollment process is for policymakers to allow automatic renewal coverage on the health insurance exchanges. For other types of health plans, including employer-based plans, Medicare Advantage and Medicare Part D, automatic re-enrollment is already a feature. Auto-renew for the insurance exchanges would help insured consumers remain insured.

“Congress should build on what we have and act to stabilize the individual market,” Serota said in a statement. “We’re offering common-sense solutions that we believe can gain bipartisan support and protect consumers.”