Congress’ punt drives Obamacare rates higher
Insurance companies blame uncertainty
Insurance rates for those who buy health care coverage through the Affordable Care Act keep rising because of continued uncertainty about the Trump administration’s plans for the law, officials and insurance experts say.
That’s despite the death Tuesday of the latest Republican attempt to repeal and replace the law, which is also referred to as Obamacare. One company has cited the uncertainty for why it is pulling out of at least one market.
Wednesday was the deadline for insurers in the 39 states that use the federal ACA exchange to make decisions on whether to sell
2018 plans. In Maine, Anthem, the Blue Cross
Blue Shield insurer, announced it would no longer sell plans on the federal Healthcare.gov exchange there.
Daniel Hilferty, CEO of Independence
Health Group, said earlier the company was deciding whether to remain on the exchange around Philadelphia, where it is based. Wednesday, he said the company would.
“Balancing the uncertainty of the market against the needs of hundreds of thousands of members depending on us, we chose the members,” said Hilferty, also chairman of the Blue Cross Blue Shield Association.
The Trump administration has refused to commit to reimbursing insurers for subsidies that reduce out-of-pocket costs, including copayments and deductibles, for those who earn less than 250% of the poverty limit, which is
$61,500 for a family of four. Instead, it’s been more of a monthly announcement, leaving insurers unable to plan ahead.
The vast majority of insurers were expected to stay on state and federal exchanges, but rate hikes above 40% in some states show the effect the administration’s actions are having on the law.
Questions about what the administration will do about subsidies are the “main cause” of rate hikes, says Sara
Collins, a vice president at the health policy foundation
Commonwealth Fund.
Insurers have said somewhere between
15% and 40% of their rate increases were due to administration efforts to undermine the law, according to ACASignups.net.
“Insurers are assuming (subsidies) will end at some point,” says Larry Levitt, executive vice president of the Kaiser Family Foundation.
About 85% (nearly 9 million people) of those buying plans on Healthcare.gov receive tax credits, while nearly 60% (about
6 million) get the cost-sharing subsidies, according to the most recent federal data.
Among insurers, Levitt says, there’s “fear that the administration will weaken enforcement of the individual mandate” that everyone have insurance. In fact, Levitt says the “only tangible thing ” the administration has done is to drop plans to increase enforcement of the mandate, leaving the issue unchanged from the Obama administration.
“People may hear what the president says and believe they are safe from the mandate,” says Levitt.
However, it’s still the law that everyone must have health insurance and the IRS is still collecting penalties from those who don’t.
Rate hikes above 40% in some states show the effect the administration’s actions are having on the law.