This year has been a scary one for the more the 900,000 Ohioans who have received health coverage thanks to the Affordable Care Act (ACA), including the roughly 38,000 local small business owners and solo entrepreneurs who depend on the marketplace for quality, affordable health insurance. Between dogged attempts to repeal the ACA without an adequate replacement plan, to President Donald Trump’s inability to commit to making federal payments that subsidize insurance for low-income individuals, the ACA marketplaces are less stable than they were just 12 months ago. Now, more than ever, we need a bipartisan plan to improve the ACA, and fortunately some lawmakers like Gov. John Kasich have taken a first step in that direction.
“You got to do this in a bipartisan way, and the thing you have to do is stabilize those insurance markets,” Kasich said during a CNN interview. “And if you want to take away payments, you’re going to create chaos. We can’t have that.”
Kasich, who introduced a plan to stabilize the ACA in August along with Colorado Gov. John Hickenlooper, is right about this issue. Under the healthcare law, insurance companies receive payments, known as cost-sharing reduction subsidies (CSRs), from the federal government that are used to lower the deductibles and co-pays of low-income enrollees. The Congressional Budget Office (CBO) recently estimated that discontinuing these payments would cause insurance premiums to skyrocket by 20 percent next year and 25 percent by 2020. In addition to raising premiums, the CBO report finds ending the CSRs would actually increase the federal deficit by $194 billion because consumers would need additional tax credits to offset their premiums, and it would cause one million people to lose their health insurance coverage.
Unfortunately, President Trump keeps saying he wants to end the CSRs – but he has not actually done so. If he does eventually pull the plug, it would likely result in a mass exodus by insurance companies from the individual market, meaning an unknown number of entrepreneurs would be unable to afford health coverage for themselves and their employees, while aspiring entrepreneurs would be unable to start a new business at all because they won’t be able to access affordable health coverage.
To end the politically created uncertainty surrounding the ACA, Hickenlooper and Kasich wisely proposed continuing the CSR payments. They also called on Congress to establish a temporary fund that states could use to create reinsurance programs that would reduce premiums, temporarily keeping the individual mandate in place and encouraging the federal government to offer robust healthcare education and outreach, which helps increase participation in the ACA.
Additionally, the Hickenlooper/Kasich plan calls on the federal government to bolster federal risk-sharing mechanisms, including risk adjustments and reinsurance to stabilize risk pools, and to maximize market participation by encouraging young people to obtain insurance.
While the plan is not perfect and lacks some specific details, these are all good ideas and would be a great start to the process of strengthening the ACA. There is much more, however, that should be done to bring greater stability to the ACA marketplaces. For example, the reinsurance program Hickenlooper and Kasich proposed should be made permanent because it would help stabilize premiums in the individual marketplaces by protecting insurers from big financial losses. What’s more, continuing Medicaid expansion would go a long way in states like Ohio, which already saw a whopping 700,000 people gain insurance by growing that program under the ACA. Additionally, we must provide more options for consumers in counties that have few participating insurers in the ACA marketplaces, for example by allowing them to purchase plans through the Federal Employee Health Benefits Program.
Now that efforts to repeal the ACA have seemingly failed, Ohio’s small firms need President Trump and his allies to stop risking the health coverage of thousands of local small business owners and their employees, stop using healthcare as a political pawn, and stop undercutting the ACA. Entrepreneurship will not thrive without easily obtainable, quality health insurance, and the reality is only federal lawmakers can take the steps needed to guarantee that this insurance coverage will remain available. Congress should follow Gov. Kasich and Gov. Hickenlooper’s example and start making positive healthcare policy immediately – Ohio’s economy and nearly one million small businesses depend on it.
Michaela Burriss is the Ohio Outreach Manager for Small Business Majority.