New Report: The Bipartisan ACA Fix Congress Has Been Looking For

Incentivizing Continuous Renewable Coverage Would Address Preexisting Conditions, Improve Private Insurance Overall

NEW YORK, NY – Voters in battleground states consistently cited the importance of insuring Americans with preexisting health conditions as a primary concern affecting voting decisions. In a new report for the Manhattan Institute, senior fellow Chris Pope takes these concerns to task, evaluating setbacks in America's current health-care system that prevent consumers with preexisting conditions from receiving optimal coverage. He finds that the popular framework of employer-sponsored health insurance—which covered 58 percent of workers under age 65 in 2018—is exacerbating dysfunction in America’s current health-care system.

Americans switch jobs (and thus health-care plans) on average every four years, leaving insurers ill-equipped to accommodate risk. To protect themselves, insurers resort to raising premiums and cherry-picking consumers who seem least likely to incur high medical costs. The upshot is a broken, fragmented, and expensive system ill-equipped to serve medically vulnerable populations, such as those with preexisting conditions.

To rectify these shortcomings and provide Americans with the highest quality of care, the U.S. should consider emulating health-care arrangements in Germany, which incentivize individuals to purchase health insurance early and maintain coverage continuously, independent of employment. Specifically, policymakers in the U.S. should:

• Let ACA plans offer discounts from age-related premiums according to the number of years enrollees have maintained continuous minimal essential coverage;
• Establish new “Lifetime Security” one-time underwritten plans with mandatory indefinite guaranteed renewability; and
• Allow full individual Coverage HRA funds to be used in “Lifetime Security” plans meeting essential health benefits.

Such a system would force private insurers to compete with each other to attract consumers, raising the quality of health care and the individual market overall.

Click here to read the full report.