Ending Obama health care subsidies would increase deficit, premiums

HARTFORD » Ending billions in federal insurance subsidies would worsen the federal deficit and increase insurance premiums, the Congressional Budget Office warned Tuesday in its report.

Nonpartisan budget analysts said the Trump administration’s pledge to end Affordable Care Act insurer subsidies means premiums will rise by 20 percent in 2018 and 25 percent in 2020.

The cost-sharing reductions, which help insurance companies lower deductibles, co-pays, and coinsurance for low-income individuals, are estimated to cost $7 billion for 2017. But ending them would drive up the federal deficit by an estimated $194 billion through 2026.

“There are no upsides to the Trump administration discontinuing these payments, it will only result in higher premiums, add to the deficit, and further drive insurers out of the marketplaces, leaving the American people with fewer options for health insurance,” U.S. Rep. John B. Larson said Tuesday. “Having failed at taking health care away from millions of Americans, the Administration and Congress must move forward to build upon the success of the Affordable Care Act, rather than seeking to tear it down. I call on President Trump to stop playing politics and do what is right for the American people.”

About 40,000 of the 98,000 individuals enrolled in Connecticut’s health insurance exchange qualify for cost-sharing reductions (CSRs) and 25 percent are qualified for advanced premium tax credits. About 25 percent are receiving no financial assistance.

Insurance companies are paid one month in advance by the federal government for what it anticipates the spending will be for the CSR customers. The payments are then reconciled at the end of the year.

Connecticut insurance carriers receive about $40 million to $50 million per year in cost-sharing reduction payments, James Wadleigh, CEO of Access Health CT, has said.

“Because they would still be required to bear the costs of CSRs even without payments from the government, participating insurers would raise premiums of ‘silver’ plans to cover the costs,” the CBO report states.

Attempts to repeal and replace the Affordable Care Act, along with repeated threats to end the cost-sharing reductions, have left Connecticut’s two insurers pondering their future participation in the marketplace.

Anthem Health Plans and Connecti Care Benefits are the last two insurance companies participating in Connecticut’s individual market and both have said they would have to reconsider their rates and possibly their participation if the cost-sharing reductions disappear.

The next federal CSR payments to insurers are expected to bemade onAug. 21.

Both companies have submitted their proposed rates for 2018, but Insurance Department regulators are waiting to see what happens over the next few weeks. Regulators anticipated finalizing rates for 2018 by Sept. 1, but will wait until Sept. 30, if necessary.

Gov. Dannel P. Malloy maintained his position that President Donald Trump owns the ACA if he’s going to make sure it collapses.

“Make no mistake, we are no longer living under the Affordable Care Act — this intentional destabilization of the markets is Trumpcare in action, recklessly risking the lives of Americans,” Malloy said.

Connecticut’s governor, who is also head of the Democratic Governors Association, said the CBO report “confirms that the President’s threat to cut subsi- dies to insurers, which offset costs for affordable coverage to low-income individuals, will drive up premiums for all. Let’s be clear — this is not a failure of the Affordable Care Act, it is a deliberate effort of President Trump to sabotage healthcare for millions of Americans in an attempt to fulfill an impetuous campaign promise.”

Lt. Gov. Nancy Wyman, who also co-chairs Access Health CT, Connecticut’s insurance exchange, said “threatening to remove the cost-sharing options not only destabilizes the marketplaces, but also guarantees cost increases for everyone. It’s going in the wrong direction rather than working to improve a law that is already serving hundreds of millions across the country.”