In the first year of enrollment under the Affordable Care Act (ACA), millions of Americans have gained access to health insurance coverage. This accomplishment is an important milestone for the country and provides peace of mind to many individuals with pre-existing medical conditions.
The challenge from here is to build on these coverage gains, to make sure the health insurance risk pool is stable, and to ensure affordability over the long term. For these goals to be realized, more people need to participate in the health insurance system --which is why health plans this week proposed a new solution to address the issue of affordability and increase the number of insured individuals: the creation of a new catastrophic plan on the ACA Exchanges.
Currently, most consumers shopping in the Exchanges are able to find the right coverage for them among the four metal tiers. Unfortunately, for some, even the lowest cost plans remain out of reach. These individuals would benefit from a new option with a lower price tag, especially as a variety of factors put pressure on premiums and discourage young and healthy individuals from signing up for coverage.
Recognizing this challenge, America's Health Insurance Plans yesterday announced a series of solutions designed to strengthen the affordability, stability, and accessibility of health care. A key component of this effort is the introduction of a new lower-premium coverage option for consumers and small businesses on the Exchanges.
This new level of coverage could be available to small businesses and individuals of all ages with a lower premium than offered by current coverage choices. These new plans would maintain important consumer protections, such as essential health benefits, no annual or lifetime limits, and zero cost-sharing for preventive health services. And they would offer peace of mind to consumers, knowing that their costs will be limited in the event of a serious illness or injury.
The ACA currently offers a catastrophic plan option, but it has serious limitations. It is available to only a limited number of individuals, and those who choose the plan are not allowed to receive subsidies for their coverage even if they qualify. Under our proposal, consumers who are eligible for premium subsidies would be able to use that financial assistance to purchase this new plan.
From the start of the health reform debate more than five years ago, there has been widespread agreement that large numbers of young and healthy consumers would be needed to balance the expected influx of consumers needing regular medical care. This will only happen if individuals, families, and small employers have choices of affordable insurance plans that meet their diverse needs and budgets.
Adding a new, more affordable coverage option is a common-sense response to a very real concern about affordability and the sustainability of the coverage gains.
The availability of lower-cost coverage options could be a powerful incentive spurring more people to sign up for coverage, especially younger and healthier individuals, which would help maintain affordability for everyone. We look forward to working with Congress and the Administration to make these options a reality.