Uncertainties tied to Trump, Congress roil health market
WASHINGTON >> When Aetna, the health insurance giant, announced this month that it was pulling out of the Affordable Care Act’s insurance exchange in Virginia in 2018, President Donald Trump responded on Twitter: “Death spiral!” When Humana announced plans to leave all the health law’s marketplaces next year, the president chimed in, “Obamacare continues to fail.”
Left unremarked on was a big reason for the instability: The Trump administration and Congress are rattling the markets.
The administration’s refusal to guarantee payment of subsidies to health insurance companies, the murky outlook for the Affordable Care Act in Congress and doubts about enforcement of the mandate for most people to have insurance are driving up insurance prices for 2018, insurers say in rate requests filed with state officials. Frustrated officials have ideas for stabilizing the individual insurance market, but they say they cannot figure out where to make their case because they have been bounced from one agency to another in the Trump administration. “We have trouble discerning who has decision-making authority,” said Julie Mix McPeak, the Tennessee insurance commissioner and president-elect of the National Association of Insurance Commissioners, which represents state officials. “We reached out to the Department of Health and Human Services. They referred us to the Office of Management and Budget, which referred us to the Department of Justice. We reached out to the White House Office of Intergovernmental Affairs.”
Fight over subsidies
The Trump administration has sent mixed signals, reflecting an internal debate about whether to stabilize insurance markets or let them deteriorate further. Trump has said he could cut off the subsidies at any time if he wanted to.
The government may clarify its plans in a legal brief to be filed Monday with the U.S. Court of Appeals for the District of Columbia Circuit. Or it could ask the court for a three-month extension, prolonging the uncertainty. State insurance commissioners have joined insurers, hospitals and congressional Democrats in urging the administration to pay “cost-sharing” subsidies, and federal health officials initially indicated they would do so. But Trump countermanded them, refusing to make any long-term commitment.
On Thursday, 15 Democratic state attorneys general, led by Xavier Becerra of California and Eric T. Schneiderman of New York, filed a motion to intervene in the case, demanding that the payments continue. In some ways, the Obama administration shares responsibility for the current mess, which has huge human, legal and political implications.
Unable to get an explicit appropriation from Congress, the Obama administration went ahead and paid the subsidies, in a way that a federal district judge later found to be unconstitutional.
The subsidies are paid to insurance companies so they can reduce deductibles and other out-of-pocket costs for low-income consumers — 7 million people this year. Continued payment of the subsidies is “critical to the viability and stability” of health insurance markets, the National Association of Insurance Commissioners said in a recent letter to congressional leaders.
“As long as the court case, House v. Price, remains unresolved and federal funding is not assured, carriers will be forced to think twice about participating on the exchanges,” the letter said. “Even if they do decide to participate, state regulators have been informed that the uncertainty of this funding could add a 15 to 20 percent load to the rates.”
Higher rate increases
Federal health officials issued a “market stabilization” rule last month. But the administration has also taken steps that destabilize the market, by creating doubts about subsidy payments to insurers and enforcement of the requirement for people to have insurance under the Affordable Care Act. Anthem, one of the nation’s largest insurers, has sought rate increases of 24 percent to 38 percent in Connecticut, based on the assumption that the Trump administration will continue paying the subsidies through 2018. If that assumption is wrong, the company said, rate increases could be much higher. With so much uncertainty, Anthem said, it expects to serve a smaller, sicker group of people next year.
“We are forecasting that the individual market will continue to shrink and that those individuals with greater health care needs will be the most likely to purchase and retain their coverage,” while “healthy members are more likely to drop coverage,” Anthem said in its Connecticut rate request.
The cost-sharing payments are only part of the problem. Insurers said the Trump administration was also destabilizing insurance markets by indicating that it would loosen enforcement of the mandate for people to have coverage or pay a penalty.