Surcharges that would penalize people for waiting to purchase health insurance until they are sick are excluded from a healthcare bill draft Senate Republicans released Thursday.
Senior Republican aides, however, have suggested that the provision, called “continuous coverage,” is still being considered so that people “don’t game the system.”
The continuous coverage provision was in the House-passed bill, the American Health Care Act. It would place 30 percent surcharges on customers’ premiums for 12 months if they are uninsured for more than 63 days. The provision is meant to replace Obamacare’s individual mandate, which obligates people buy insurance or pay a fine. Through these mechanisms, policymakers aim to provide an incentive for people who otherwise wouldn’t purchase coverage to get it, namely young, healthy adults that help balance out the risk pools to reduce costs to help pay for sicker enrollees. They are also intended to curtail behavior by which people wait until they are sick to enroll, which can drive up costs and disincentivizes regular checkups.
The Senate draft also incentivizes people to buy coverage by allowing them to receive tax credits adjusted for age, income and geography.
“Everybody wants insurance,” a senior Republican aide said on a call with reporters shortly after the bill was released to the public. “The benefit of what we are doing is that we are able to make more people eligible for tax credits.”
The continuous coverage provision is favored by the health insurance lobby. Marilyn Tavenner, the president and CEO of America’s Health Insurance Plans, which represents insurers, has stressed the need for continuous coverage in a healthcare reform bill.
“We need effective incentives to encourage consumers to get and keep insurance so coverage can be affordable for everyone,” she said at a Senate hearing in February.
