The creation of a $15 billion stabilization fund could lower premiums on Obamacare’s exchanges by an average of 17 percent, according to a new analysis.
The analysis from consulting firm Avalere Health comes as the Senate is expected to unveil a new Obamacare stabilization package. But it remains unclear if the items that Avalere says will lead to premium decreases will be included in the bill.
Avalere found that adding a $15 billion reinsurance fund could help to lower average premiums. Reinsurance would pay Obamacare insurers for their sickest claims, which would in theory lead to lower premiums for everyone else.
Avalere said guaranteeing insurer subsidies to lower out-of-pocket costs for low-income Obamacare customers and delaying a tax on insurers would contribute to the 17 percent decline.
Sen. Lamar Alexander, R-Tenn., spearheading talks in the Republican side, has not been in favor a federal reinsurance program. He wants to let states make their own programs through adding flexibility to federal waivers.
Alexander has been in favor of continuing the insurer subsidies for one year.
Democrats are more in favor of a federal reinsurance program. They also want to add in outreach funding after the Trump administration slashed ad funding for Obamacare by 90 percent for 2018.
Conservative Republicans may be reticent to provide $15 billion for reinsurance, as outside conservative groups have blasted the bipartisan talks as working on a bailout of the controversial law.
Avalere’s model estimated that the average Obamacare premium would go up by 18 percent if Congress does nothing, although some plans have expected to raise their premiums higher, even with the insurer subsidies.
