Repeal of individual mandate could raise Nebraska premiums
By GRANT SCHULTE
Feb. 04, 2018
LINCOLN, Neb. (AP) — Nebraska residents could see their health insurance premiums spike in future years now that Congress has gutted the legal requirement to purchase coverage, but advocates say it's too early to know how much prices could rise.
The individual mandate was effectively repealed under the Republican congressional tax plan signed by President Donald Trump, who called it "the core of disastrous Obamacare" in his State of the Union speech last week.
The mandate was a key part of the Affordable Care Act because it required all residents to buy coverage or pay a tax penalty. Congressional Republicans ended the tax penalty, rendering it toothless.
Nebraska groups that support the law said they're concerned that without the mandate, healthy people who help subsidize everyone's coverage will leave their plans, resulting in higher premiums for those who remain.
Nebraska has one provider of individual health insurance plans under the Affordable Care Act, Minnesota-based Medica. Two other insurers, Blue Cross Blue Shield of Nebraska and Aetna Health, dropped out of the federal marketplace this year, citing multimillion dollar losses and uncertainty in the markets.
"The mandate was intended to keep healthy people in the market and its repeal, which goes into effect next year, will not help lower premiums," said Medica spokesman Greg Bury. "We need to see the full picture of who is in the market and who has already left the market to determine the impact" of the repeal.
The problem could be especially pronounced in rural Nebraska, which has high enrollment because many of those residents don't get insurance through their job, said Molly McCleery, deputy director of health care access for Nebraska Appleseed, a public interest law firm that supports the health care law.
"The big question is whether people will enroll in market coverage without the penalty," McCleery said.
McCleery said some residents who have signed up mistakenly believe that they can drop coverage right away, even though the mandate repeal doesn't go into effect until 2019.
Even if premiums increase, many Nebraska residents will see little difference in what they pay because federal subsidies for individuals will rise to offset the additional costs. Residents who make too much to qualify for the subsidies are most likely to see a big change.
Ending the mandate will leave an additional 13 million Americans uninsured between 2019 and 2027 while reducing the federal deficit by $338 billion during that time period, according to the Congressional Budget Office. Roughly 28 million Americans were uninsured as of last year.
Average premiums in the individual market would increase by about 10 percent in most years during that period, the report found.
The CBO hasn't broken down its estimates by state, but one national advocacy group predicted that Nebraska residents could see sharp increases in their premium costs between 2019 and 2027.
A 40-year-old Nebraskan who doesn't get subsidies in the individual market could pay an additional $1,264 per year for coverage by 2027, according to the Commonwealth Fund, a nonprofit that seeks to improve access to health care. A 60-year-old in the same situation would pay an additional $2,684, the group found.
Nebraska Department of Insurance Director Bruce Ramge said his agency hasn't analyzed how many people will opt out of coverage once the repeal takes effect. But he said plan prices and the availability of subsidies for low-income residents are likely to play a larger role than a potential tax penalty.
"There are many important factors" that play into purchasing decisions, Ramge said.
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