Health subsidies may be at risk
Trump hints he may not OK funds for provision of ACA used by millions of people but lawmakers are speaking out
Uncertainty over the Affordable Care Act’s fate is threatening the future of the market for everyone who buys their own insurance in some areas, as insurers exit public exchanges and individual insurance plans altogether.
President Trump escalated fears this week by saying he may not authorize payment of the Affordable Care Act-required subsidies that as many as 7 million people use to help pay their deductibles and co-payments. Trump said the move should prompt Democrats to negotiate on health care reform.
But now, a bipartisan group that includes high-level former members of Congress and regulators is fighting back. In a statement released Thursday by the Bipartisan Policy Center, former Senate majority leaders Bill Frist, R-Tenn.; Tom Daschle, D- S.D.; and others said the uncertainty means higher costs for consumers. The group noted more insurers will leave the exchanges and either stop selling individual insurance plans altogether or significantly boost premiums.
Frist, a physician, apparently is the highest-level Republican to come out in favor of the costsharing reduction subsidies, and he was joined by conservative health experts, including Avik Roy, James Capretta and Republican former Health and Human Services official Gail Wilensky.
“In my conversations with health care executives, insurance CEOs and health policy experts, the number one issue raised to stabilize the market while we make broader improvements to the ACA was continuing to pay CSRs in 2018,” Frist said in an emailed statement.
These subsidies are available on a sliding scale for consumers with incomes from 100% to 250% of the federal poverty level or from about $24,000 to $97,000 for a family of four.
Most of those eligible for the subsidies saw their out-of-pocket expenses drop from $1,500 to $1,000 per year, and those with the lowest incomes could have their deductibles lowered by up to $3,500 a year in 2017, the statement said.
Real estate agents and other self-employed people who don’t get insurance through the government or their employers didn’t have to buy their individual plans on the federal or state ACA exchanges unless they were getting tax credits or subsidies. Some insurers that left the Affordable Care Act exchanges in certain states continued selling these off-exchange plans so they wouldn’t be prohibited from returning if conditions improved under some states’ laws. That’s starting to change:
Iowa. There’s only one small insurer — Medica — left selling individual insurance plans in Iowa for 2018 with the departure of both Aetna and Wellmark. Medica still hasn’t committed to selling individual insurance in Iowa for 2018. That means Iowans in most counties could be
left with no carriers that offer individual insurance. Tennessee. Humana no longer sells plans on or off the exchanges in Tennessee for 2018, while 16 counties in the eastern part of the state have no on-exchange plans for next year. Without assurances about the future of the state’s marketplace, Tennessee’s insurance commissioner said it would be difficult to lure insurers back to counties without them.
Arizona. Humana and UnitedHealthcare no longer sell on- or off-exchange plans. Six of eight health insurance companies — most citing losses and the unpredictability of the market — exited Arizona’s marketplace for 2017.
A UnitedHealthcare affiliate still sells “short-term” plans in Arizona that don’t cover a person for the entire year and don’t comply with the ACA. Some can exclude coverage for existing medical conditions. These plans, which typically last three months, have become a popular option for Arizona consumers. Arizona’s benchmark plan had the largest premium increase in the nation this year and is the third most expensive among the 44 states, according to HHS.
As deadlines loom between now and June for insurers to file their rates with states, they need assurance from the Trump administration and Congress that the subsidies will continue to be funded, said Wilensky. Without this, “more insurers will drop out of the insurance exchanges, endangering access to care for too many Americans,” she said.
The House filed a lawsuit against the Obama administration claiming it was illegally reimbursing exchange insurers for reducing cost sharing for low-income customers. The suit is still pending and the 10 people who signed onto the Bipartisan Policy Center’s statement didn’t take a position on it.
“Insurers are looking for certainty from the administration and Congress to stabilize the individual marketplace. Without committing now to the continuation of CSR payments, many Americans may lose access to much needed health care,” Daschle said in an emailed comment.
That would be a familiar scenario for Phoenix resident Kim Sertich, 54, who said her insurance has been canceled three times since the ACA exchange launched in 2014.
In past years, Sertich managed to find a new plan with coverage that fit her needs, but the exodus of insurers from Arizona’s individual marketplace this year made that option all but impossible.
“For me, opting out of the ACA was a slow build,” Sertich said. “Basically, every year I had to go through the process all over again.”
She pays $199 a month for a Liberty HealthShare plan that does not pay for prescription drugs. She is healthy and optimistic that the coverage will meet her needs now, but she worries what’s ahead for similar people who don’t qualify for marketplace subsidies and have few options.
Most of those eligible for the subsidies saw their out-ofpocket expenses drop from $1,500 to $1,000 per year, and those with the lowest incomes could have their deductibles lowered by up to $3,500 a year in 2017, the statement said.