11/01/2017
In April, Donald Trump told The Wall Street Journal that he planned to use the powers of his office to jeopardize health-care access for millions of low-income people, while undermining America’s insurance markets — because he believed that voters would blame the ensuing chaos on the Democratic Party, leaving Chuck Schumer desperate to negotiate with the White House over Obamacare repeal.
Specifically, the president threatened to stop paying out the Affordable Care Act’s “cost-sharing reductions” — subsidies that defray the losses insurers suffer when they sell low-income Obamacare enrollees coverage at below-market rates. The Affordable Care Act requires health insurance companies to reduce deductibles and other forms of cost-sharing for eligible enrollees. The federal government has, until now, reimbursed the companies for the expense. The payments are worth $7 billion this year and $10 billion next year.
This month, Trump halted payments to health insurance companies serving low-income customers. Trump’s decision to cut off billions of dollars owed to health insurance providers caused those companies to substantially increase premiums to cover their losses. In doing so, the administration has jeopardized health-care access for low-income people, while undermining America’s insurance markets.
The Henry J. Kaiser Family Foundation studied documents that health insurance carriers submitted to regulators in 32 states and the District of Columbia. These documents detail price changes for health insurance policies and the justification for those changes.
Among those states, Trump’s action caused premium increases that range from 7 percent to 38 percent higher than they would have been for mid-level “Silver” health plans, the Kaiser Family Foundation reported. The analysis includes specific examples of how specific insurers dealt with Trump’s decision to deny their reimbursements, based on information they provided to state insurance agencies.
Health insurance companies and most state governments anticipated that Trump might cut off this funding and planned ahead to prevent major financial losses and further disruption to the market. Some states and their insurers opted to only add supplementary premium increases to Silver plans, because those are the ones consumers must choose to receive discounts on out-of-pocket costs. In some cases, those extra price increases only apply to Silver plans sold on exchanges, which are the only places to receive financial assistance, and not on Silver plans bought outside the exchanges. Other insurers spread the increased costs across all types of insurance ― Bronze, Silver, Gold and Platinum ― either only on the exchanges or on and off the exchanges.
Ironically, Trump actually increased federal spending when he ended those payments to insurance companies. Because premium subsidies rise when prices rise, those bigger subsidies will cost taxpayers $194 billion over the coming decade, the Congressional Budget Office projects.
A separate report published Wednesday outlined the overall landscape for health insurance prices on the exchanges next year in the 39 states that use the federally operated HealthCare.gov exchanges. Almost 6 million people, or 57 percent of exchange enrollees, qualified for cost-sharing reductions when they enrolled for 2017, according to the Department of Health and Human Services.
For 2018, the average price increased 18 percent for Bronze plans, 34 percent for Silver plans, 16 percent for Gold plans and 24 percent for Platinum plans, according to the consulting firm Avalere Health. Across those 39 states, the average premium for a Silver plan ― by far the most popular option on the exchanges ― next year is $743, Avalere found. The average prices for Bronze, Gold and Platinum plans next year is $561, $831 and $1,125, respectively.
