Un­cer­tain­ties tied to Trump, Congress roil health mar­ket

Honolulu Star-Advertiser - - NATION - By Robert Pear

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.

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