The Trump administration’s decision to stop payments to insurance companies that help keep premium costs down will cause the price of many health care plans in Washington to spike.
Last month, the state board in charge of administering Washington’s health insurance market approved large premium increases for plans sold in the state. The average increase was 24 percent over last year’s premiums. However, large as that premium increase is, it assumed the federal government would continue providing “cost-sharing reductions,” or CSRs, to insurance companies. Ever since Donald Trump’s election, there has been ample doubt about whether the federal payments would keep coming in, so much so that the state Insurance Commissioner actually had two rates approved: One assuming the payments would come in and another assuming they wouldn’t.
For example, for the Silver Plan offered by Kaiser Foundation Health Plan of WA on the exchange, a premium increase of 19 percent was approved, meaning customers would be paying $328 per month for the plan. But without CSRs, the plan’s cost will go up 47 percent, to $404 per month. These aren’t necessarily the prices that customers will be paying, since the Affordable Care Act offers a series of subsidies based on people’s incomes. Yet it shows just how big of blow eliminating CSRs is.
“The uncertainty surrounding cost-sharing reductions continues to weigh heavily on our state’s individual market,” said Pam MacEwan, CEO of the Washington Health Benefit Exchange, said in September when the exchange board approved the plans. “We presume that the lower rate will carry through the 2018 plan year as funding for CSRs continues from the federal government. That said, it is important to prepare for a scenario where the federal government discontinues those payments.”
In a statement Friday, Insurance Commission Mike Kreidler called Trump’s move a “devastating blow to thousands of people in Washington.”
“I will be considering further action to challenge the decision and protect consumers and our individual health insurance market,” he said. He said that last year, CSRs to Washington insurers amounted to $65 million.
“Contrary to what the president says, these payments are not ‘kickbacks’ to health insurers but rather a lifeline for many consumers to afford coverage. The president’s combined decisions ignore consumer-protection recommendations from insurance regulators, doctors, health insurers, business organizations and advocates across the country,” he said.
If his Twitter account is to be believed, Trump is using the payments as way to get Democrats to compromise on reforming President Obama’s signature heath care plan.
“The Democrats ObamaCare is imploding,” he wrote. “Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!” However, that fix will not be a bill co-sponsored by Washington Sen. Patty Murray, according to Politico. On Friday morning, Trump’s budget director Mick Mulvaney said the administration won’t support Murray-Alexander, the bipartisan health care bill crafted by Murray and Sen. Lamar Alexander, R-Tenn.