[Vision2020] Kaiser Report: Trump's Refusal to Make Payments under Obamacare caused Huge Premium Increases

[Nicholas Gier]

Huffington Post, Oct. 27, 2017

President Donald Trump <http://www.huffingtonpost.com/topic/donald-trump>’s
decision to cut off billions of dollars owed to health insurance providers
under the Affordable Care Act caused those companies to substantially
increase premiums to cover their losses, according to an analysis
<https://www.kff.org/other/issue-brief/how-the-loss-of-cost-sharing-subsidy-payments-is-affecting-2018-premiums>
published
Friday.

Enrollment on health insurance exchanges like HealthCare.gov
<https://www.healthcare.gov/> begins Nov. 1 and runs until Dec. 15 in most
states; a few have later deadlines. Consumers who use these exchanges or
purchase their coverage directly from a health insurance company or through
a broker can expect to see large rate hikes when they shop for plans.
Prices already were set to rise before Trump’s action exacerbated the
problem.

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
<https://www.huffingtonpost.com/entry/trump-obamacare-payments-insurers_us_59e01859e4b03a7be57f71a9>
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 numerous examples
<https://www.kff.org/other/issue-brief/how-the-loss-of-cost-sharing-subsidy-payments-is-affecting-2018-premiums>
of
how specific insurers dealt with Trump’s decision to deny their
reimbursements, based on information they provided to state insurance
agencies.

This month, Trump halted payments to health insurance companies serving
low-income customers. These so-called cost-sharing reduction payments are
intended to reimburse insurers that provide discounts on out-of-pocket
costs for people earning up to 250 percent of the federal poverty level
<http://familiesusa.org/product/federal-poverty-guidelines>, or $30,150 for
a single person.

The Affordable Care Act requires health insurance companies to reduce
deductibles and other forms of cost-sharing for eligible enrollees. The
federal government is supposed to repay
<https://www.huffingtonpost.com/entry/trump-bailout-obamacare_us_5903aa88e4b0bb2d086e8b94>
the
companies for the expense. The payments are worth $7 billion this year
<https://www.cbo.gov/sites/default/files/recurringdata/51298-2017-01-healthinsurance.pdf>
and
$10 billion next year, according to the Congressional Budget Office.

But Trump decided to cut off those funds
<https://www.huffingtonpost.com/entry/trump-obamacare-payments-insurers_us_59e01859e4b03a7be57f71a9>.
The spending to reimburse health insurance companies is the subject of a
three-year-old legal dispute
<http://www.huffingtonpost.com/2014/11/21/gop-lawsuit-obamacare_n_6198938.html>
started
by then-House Speaker John Boehner
<http://www.huffingtonpost.com/topic/john-boehner> (R-Ohio), who alleged
that then-President Barack Obama
<http://www.huffingtonpost.com/topic/barack-obama>’s administration was
unlawfully spending money Congress hadn’t authorized.

Last year, a federal judge sided with House Republicans
<https://www.huffingtonpost.com/entry/republicans-obamacare-win_us_5734b476e4b077d4d6f24f8e>
over
Obama, but allowed the federal government to continue repaying insurers
while the case worked its way through the appeals process. When Trump
became president this year, his administration became the defendant in the
case, and continued to make the payments until his announcement this month.

After months of threatening to end the cost-sharing reduction payments,
Trump followed through this month by stopping the payments and dropping the
federal government’s appeal of the House GOP
<http://www.huffingtonpost.com/topic/gop> lawsuit. A group of state
attorneys general has taken up the defense
<https://www.huffingtonpost.com/entry/court-trump-obamacare-sabotage_us_598128c6e4b09d24e993d470>
 instead.

As a consequence, health insurance companies are set to lose an equivalent
amount of money because they are still required to reduce eligible
customers’ out-of-pocket costs.
JI SUB JEONG/HUFFPOST
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Health insurance companies and most state governments anticipated that
Trump might cut off this funding and adopted several strategies
<https://fivethirtyeight.com/features/a-state-by-state-guide-to-those-wonky-obamacare-payments-you-keep-hearing-about/>
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.

Trump’s decision does not affect the availability of these cost-sharing
reductions or subsidies on premiums for those who qualify. The tax credit
subsidies available to reduce monthly premiums for those earning up to four
times the poverty line ― or $48,240 for a single person ― largely shield
eligible enrollees from price increases because they grow along with the
price of Silver plans.

Almost 6 million people
<https://downloads.cms.gov/files/effectuated-enrollment-snapshot-report-06-12-17.pdf>,
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.

Ironically, Trump actually increased federal spending
<https://www.huffingtonpost.com/entry/trump-obamacare-sabotage-cbo-report_us_59932d45e4b0e789a9470748>
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.

But health insurance consumers who earn too much to qualify for subsidies
will be forced to bear the full brunt
<https://khn.org/news/overlooked-by-aca-many-people-paying-full-price-for-insurance-getting-slammed/>
of
the rate increases. More than 80 percent of exchange enrollees received
subsidies this year, but that still leaves millions inside and outside the
exchanges who pay full price for their insurance.

Senate Health, Education, Labor and Pensions Committee Chairman Lamar
Alexander <http://www.huffingtonpost.com/topic/lamar-alexander> (R-Tenn.)
and ranking member Patty Murray
<http://www.huffingtonpost.com/topic/patty-murray> (D-Wash.) introduced
legislation
<https://www.huffingtonpost.com/entry/24-senators-line-up-behind-health-care-proposal-offering-hope-it-could-still-pass_us_59e8f6a9e4b0df10767ba8b4>
this
month to restore the cost-sharing reduction payments that is co-sponsored
by an additional 12 Republicans
<http://www.huffingtonpost.com/topic/republican-party> and 12 Democrats
<http://www.huffingtonpost.com/topic/democratic-party>.

Senate Finance Committee Chairman Orrin Hatch
<http://www.huffingtonpost.com/topic/orrin-hatch> (R-Utah) and House Ways
and Means Committee Chairman Kevin Brady
<http://www.huffingtonpost.com/topic/kevin-brady> (R-Texas) plan to
introduce
<https://www.bloomberg.com/news/articles/2017-10-24/republicans-push-new-deal-on-obamacare-payments-ending-mandates>
a
competing bill with no Democratic supporters. Trump has sent very mixed
signals
<http://www.politico.com/interactives/2017/obamacare-trump-alexander-murray-mixed-signals/>
about
his position on these efforts.

A separate report
<http://avalere.com/expertise/managed-care/insights/silver-exchange-premiums-rise-34-on-average-in-2018>
published
Wednesday outlined the overall landscape for health insurance prices on the
exchanges next year in the 39 states
<https://www.kff.org/health-reform/state-indicator/state-decisions-for-creating-health-insurance-exchanges-and-expanding-medicaid/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D>
that
use the federally operated HealthCare.gov exchanges.

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.

-- 

A society grows great when old men plant trees whose shade they know they
shall never sit in.

-Greek proverb

“Enlightenment is man’s emergence from his self-imposed immaturity.
Immaturity is the inability to use one’s understanding without guidance
from another. This immaturity is self- imposed when its cause lies not in
lack of understanding, but in lack of resolve and courage to use it without
guidance from another. Sapere Aude! ‘Have courage to use your own
understand-ing!—that is the motto of enlightenment.

--Immanuel Kant
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