Insurers, health care professionals and state officials are raising concerns about how President Donald Trump’s move to end the Affordable Care Act’s cost-sharing reduction payments will affect the most needy patients.
“More than half of Pennsylvania’s insurance marketplace enrollees rely on these subsidies to gain access to affordable, reliable health care coverage,” said Andy Carter, president and CEO of The Hospital and Healthsystem Association of Pennsylvania.
“Without cost-sharing subsidies, more than half a million Pennsylvanians could see their insurance premiums spike by more than 20 percent during 2018, potentially pricing many consumers out of the marketplace,” Carter added.
The White House said Thursday that it would end the subsidy payments, which the administration said were not funded by Congress and illegal.
“The bailout of insurance companies through these unlawful payments is yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system,” a White House statement said.
A number of states affected by the cutoff rushed to defend the subsidies.
Pennsylvania Attorney General Josh Shapiro on Friday announced that he was joining 18 other state AGs in suing the president to prevent him from stopping the payments.
“The Affordable Care Act is the law of the land. It set up cost sharing reduction payments so Americans could have the ability to purchase individual health insurance plans on their own,” Shapiro said.
The suit alleges that by stopping the payments unilaterally, Trump “has acted arbitrarily and capriciously and in clear violation of his legal responsibilities under the Affordable Care Act. And through his ongoing efforts to sabotage the ACA, he has failed in his constitutional obligation to take care that the laws be faithfully executed.”
Pa. leaders’ reaction
Pennsylvania’s acting Insurance Commissioner, Jessica Altman, meanwhile, argued against the administration’s assessment.
“Cost-sharing reductions (CSR) are not a bailout to insurance companies — they’re part of an agreement to help lower-income consumers around the country afford health insurance with lower out-of-pocket costs like co-pays and deductibles,” Altman said.
“Insurers are still required to offer these lower costs whether cost-sharing reductions are paid or not, and we have worked closely with our individual market participants to ensure adequate rates are in place for the 2018 plan year,” she added. “However, by choosing this moment to make a definitive statement that CSR payments cannot legally be made, it reneges on expectations insurers had when establishing rates for 2017.”
The subsidy cuts followed Trump’s signing on Thursday of an executive order that would allow use of so-called association health plans.
Trump’s order was promoted as a means of allowing small businesses and trade associations, in particular, to purchase less expensive plans — crossing state lines, in some cases.
Altman said Trump “glorified sales of association health plans across state lines” ignoring the fact that interstate insurance sales prevent state regulators from protecting consumers who purchase plans sold in a different state.
“My department has previously had to shut down association health plans due to millions of dollars of unpaid claims,” Altman said.
Pennsylvania Gov. Tom Wolf was more trenchant in his assessment.
“The president and Republicans in Washington are doing everything in their power to sabotage our health insurance markets and cause chaos for Pennsylvania families, seniors, and people with pre-existing conditions,” Wolf said.
Officials with Pittsburgh-based insurer Highmark Inc., which has a substantial presence in the midstate, expressed concern about market stability.
“Highmark has long advocated for policies to stabilize the individual market, including insurance parameters that encourage the alignment of premium and risk, distinct funding for individuals with high medical costs and strong incentives to obtain and maintain health insurance coverage,” company spokesman Leilyn Perri said.
“We have continue to urge leaders in Washington to continue to focus on these and other policies that moderate premiums and promote choice and competition in a stable, private insurance market,” Perri added.
A spokeswoman for Dauphin County-based Capital BlueCross said the insurer is still assessing what the moves will mean.
“Yesterday, several announcements were made by the federal government regarding health insurance and coverage. Today we are analyzing the announcements and how they may impact our customers,” Kirsten Page said, adding: “There is no change to coverage for our customers at this time.”
“We are working closely with the Pennsylvania Insurance Department, the BlueCross BlueShield Association, and other key stakeholders to determine the long term impact and how to best continue providing access to affordable health care coverage to our customers,” Page added.
The association, in collaboration with another trade group, America’s Health Insurance Plans, released a statement arguing that the subsidies are not a bailout, but are “passed from the federal government through health plans to medical providers to help lower costs for patients who see a doctor to treat their cancer or fill a prescription for a life-saving medication.”
“This action will make it harder for patients to access the care they need. Costs will go up and choices will be restricted,” the statement added.