Congressman David Schweikert (AZ-06) and Congressman Daniel Webster (FL-11) introduced H.R. 2789 to amend the Public Health Service Act to establish a health insurance Federal Invisible Risk Sharing Program.
After re-introduction of the bill, Congressman Schweikert and Webster released the following statement:
“As healthcare costs continue to rise, we must develop solutions that lower premiums for individuals and families. The future of America’s healthcare will rely on financing cures for chronic conditions, leveraging innovative technology, and helping curb the high cost of care for unique groups,” Schweikert said. “This legislation will establish a Federal Indivisible Risk Sharing program that has proven to be successful in other states and can help to alleviate the pressure on insurance companies to split the high cost of one group to the entire plan.
“Americans deserve a healthcare system that provides access to the care they need, from the doctor they choose, at a price they can afford,” Webster said. “This bill targets one of the chief drivers of healthcare spending – taking care of those who are very sick. It provides a proven way to achieve the goal of providing every American, regardless of pre-existing conditions, access to affordable healthcare.”
This bill would establish a federal invisible risk sharing program for insurance companies to identify their small percentage of high-cost patients and place them in the Invisible Risk Sharing Program. According to Kaiser Foundation research, 10 percent of the sickest individuals account for nearly two thirds of population health spending. This means that healthier individuals are covering the costs of a small number of high cost patients.
This program sets up a reimbursement system for insurance companies to cover patients’ healthcare expenses above a certain dollar amount. This has been proven to work. In 2011, Maine created an Invisible Risk Sharing Program and rescued itself from its health insurance market’s death spiral. Maine improved the rate of health insurance coverage for those with pre-existing conditions and young, healthy enrollees who had been fleeing the insurance market for years — all at lower cost.
These instances of high-cost patients are especially true in the individual Affordable Care Act (ACA) marketplace because there is a smaller insurance pool for these costs to be allocated, as opposed to the large group or private market where costs can be disbursed over a larger number of people – the cost exposure to any one individual is limited.
H.R. 2879 offers predictability to the individual marketplace for individuals and insurers to give states the ability to manage the program based on their own needs, over time. This is a proven model to provide affordability and stability to the health insurance marketplace.