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Congress needs to mitigate what could be substantial cost increases for both insurers and their members due to the COVID-19 pandemic, warns Covered California, the Golden State's Affordable Care Act marketplace.

The one-year projected costs in the commercial market range from $34 billion to $251 billion for testing, treatment and care specifically related to COVID-19, according to Covered California's policy/actuarial brief, "The Potential National Health Cost Impacts to Consumers, Employers and Insurers in the Commercial Market Due to COVID-19."

In the absence of federal action, premium increases in the individual and employer markets for 2021 — which are in the process of being set now — could be 40 percent or more solely because of COVID-19 costs.

"Covered California's analysis shows the impact of COVID-19 will be significant, and that absent federal action, consumers, employers and our entire health care system may be facing unforeseen costs that could exceed $251 billion," says Covered California executive director Peter V. Lee. "Consumers will feel these costs through higher out-of-pocket expenses and premiums, as well as the potential of employers dropping coverage or shifting more costs to employees."

The brief recommends that Congress consider these actions to mitigate the potential impact of these cost increases:

– Enhance the federal financial assistance provided in the individual market to increase the level of tax credits for those earning under 400 percent of the federal poverty level and expand subsidies to those earning more than 400 percent FPL, as California implemented on a three-year basis in 2020.

– Establish a temporary program to limit the costs of COVID-19 for health insurers, self-insured employers and those they cover, which would directly benefit individuals and small employers for 2020 and allow for more certainty in their pricing for 2021.

– Establish a national special-enrollment period for the individual market, such as has already been adopted by 12 marketplaces representing 30 percent of Americans.

"As we have seen throughout this crisis, there is no time to waste. We must take action now to prevent the pain of this epidemic from becoming worse for hundreds of millions of Americans next year," Lee says. "Reinsurance policies under consideration in Washington — that offer mechanisms to provide federal funding for portions of unforeseen COVID-19 costs for the individual and employer markets, along with Medicaid managed care programs — could provide needed funds and certainty for consumers, small and large employers and states across the nation."

While Covered California's analysis deals with the commercial market, other populations — including those in Medicare, Medicaid, other public programs and the uninsured — will also need a comprehensive review and solutions to address the unplanned for costs, he adds.

Others are also lobbying Congress, including insurance industry groups America's Health Insurance Plans and the Blue Cross and Blue Shield Association, urging federal lawmakers to enact policies to maintain a stable marketplace for insurance, according to Modern Healthcare.

"They are pushing for a temporary risk mitigation program to compensate insurers for extreme costs to keep premiums from spiking," Modern Healthcare writes. "Among other recommendations, they have also asked Congress to provide funding to support coverage for employees who lose their jobs, and to allow those workers to enroll in individual market coverage through a special enrollment period, as several states have already done."



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Katie Kuehner-Hebert

Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.