AAA comment letter on Senate bill 112009

November 20, 2009 The Honorable Harry Reid The Honorable Mitch McConnell Majority Leader Minority Leader U.S. Senate U.S. Senate 522 Hart Senate Office Building 361-A Russell Senate Office Building Washington, DC 20510 Washington, DC 20510 Re: Patient Protection and Affordable Care Act Dear Majority Leader Reid and Minority Leader McConnell: 1The American Academy of Actuaries’ Health Practice Council commends members of the Senate as you prepare to debate and vote on the Patient Protection and Affordable Care Act. We share with you the goals of reducing the numbers of uninsured, increasing the availability of affordable coverage, controlling health spending growth, and improving the quality of care. On behalf of the council, I appreciate this opportunity to provide the following comments outlining the three key criteria that need to be considered when evaluating whether this legislation will lead to a viable health insurance system, and how the legislation can be improved to meet these goals. In particular:  For insurance markets to be viable, they must attract a broad cross section of risks. Implementing market reforms to prohibit insurers from denying coverage and to restrict how much premiums can vary will result in adverse selection and upward pressure on premiums unless lower-risk individuals have incentives to purchase coverage. An individual mandate can bring lower-risk individuals into the pool. To be effective, however, the ...