Congressional leaders continue to discuss if they should stabilize Affordable Care Act (ACA) insurance markets and the best way to do so. There are a number of issues remaining to be addressed before market stabilization legislation is included in the current omnibus bill.

The debate continues as a recently released Congressional Budget Office (CBO) analysis suggest that federal reinsurance funds could reduce premiums for 2019 and beyond. Most of the attention is now centered on Senators Lamar Alexander (R-TN) and Susan Collins (R-ME) who developed a new market stabilization package. The proposal includes funding for cost-sharing reduction (CSR) payments for three years, $10 billion in annual reinsurance funding for three years, additional Section 1332 waiver flexibility and expanded eligibility for catastrophic plans.

The Alexander/Collins package appears to combine elements of two bipartisan proposals developed last fall by Senators Alexander and Patty Murray (D-WA) and Senators Collins and Bill Nelson (D-FL). According to the CBO, the Alexander/Collins proposal would reduce premiums by 10 percent in 2019 and by 20 percent in 2020 and 2021 for states that receive reinsurance funding.

Congress needs to act soon if they hope to impact rates for next year as many insurers have already begun designing their plans and setting rates for 2019. They also may be feeling pressure due to the election year and because premium stabilization efforts are likely more critical for 2019 than 2018 due to heightened federal uncertainty.

Beginning in 2019, the individual mandate penalty will no longer be in effect, meaning individuals will no longer pay a tax penalty for going without health insurance for more than three months.  These changes are expected to significantly increase premiums and increase the number of uninsured Americans in 2019.