A publication of the Kentucky Center for Public Service Journalism

Trump threat to stop subsidies has insurers jumpy; CareSource to refile rate plan in 61 Ky. counties

By Melissa Patrick
Kentucky Health News

President Trump’s threats to stop funding the cost-reduction payments that help low- and moderate-income people afford Obamacare health insurance has created great uncertainty for insurers, and is likely the reason CareSource just withdrew its initial rate filing in Kentucky.

CareSource, which planned to offer individual plans in 61 Kentucky counties, originally requested a 20.8 percent rate hike, but withdrew this initial filing request Aug. 3. It has until Aug. 16 to file another one.

President Donald Trump

“We are currently in the filing and review period for marketplace plans and CareSource is continuing to evaluate its offerings for 2018. CareSource is committed to providing Kentuckians affordable and quality coverage options.” Claire Zois, a spokeswoman for CareSource, said in an e-mail when asked why the filing was withdrawn.

Trump’s most recent threats to remove the subsidies have come by way of tweets sent in response to Senate Republicans being unable to pass a partisan health law to repeal and replace the Patient Protection and Affordable Care Act.

One tweet said, “If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!” (An Obama administration rule allowed members and their staffs to enroll through the small-business exchange for the District of Columbia, providing an employer match from the government.)

Even if Trump ends the cost-sharing payments, which total about $7 billion a year, insurers would remain responsible for providing them, but wouldn’t be reimbursed. Insurers have said they would respond by raising premiums by as much as another 20 percent to make up the lost revenue.

Anthem Health Plan of Kentucky, the only insurer offering individual marketplace plans in every Kentucky county in 2018, has already requested a 34.1 percent rate increase in Kentucky, one of the largest in the nation.

Anthem has said that if this uncertainty isn’t resolved soon, it may have to refile for bigger hikes and decrease its level of marketplace participation, The Wall Street Journal reports. Anthem has withdrawn from three states and much of California, the most populous state.

Harland Stanley of Louisville, an independent researcher who pays about $400 a month for a plan from Anthem, $120 more than last year, told the Journal that he is concerned about these rate hikes. “It’s going to hurt,” said Stanley, 53. “I worry about, what if it keeps going? When is this going to stop?”

The Kentucky Department of Insurance expects to finalize private health plans by Aug. 16, the last day for insurers who want to participate in the federal marketplace to file rates. Insurers have until Sept. 27 to sign federal contracts to offer plans in 2018.

An Axios map shows that Kentucky, with about 36,000 people qualifying for cost-saving reductions in 2017, would be one of the states least affected by the cuts. The overwhelming majority of Kentuckians who gained health insurance through Obamacare did so through the expansion of Medicaid to those who earn up to 138 percent of the federal poverty line.

Vox reports, “Those that stand to suffer the most are actually enrollees with slightly higher incomes, who do not qualify for subsidies and would be stuck paying the full price of that rate hike.”

It doesn’t look like this uncertainty is going to end any day soon. Trump’s budget director Mick Mulvaney told Chris Cuomo on CNN’s “New Day” that they would continue deciding monthly whether to make the subsidy payments. July’s payments have been made and the next round of payments is due Aug. 21.

Court rulings, governors and bipartisan efforts

Trump’s threat to stop the payments may be harder to carry out since a federal appeals court ruled Aug. 1 that 16 state attorneys general, including Kentucky’s Attorney General Andy Beshear, can defend the cost-sharing subsidies on behalf of their consumers, The Hill reports. “This could make it harder for the Trump administration to quickly and unilaterally end cost-sharing subsidy payments to insurers,” Kaiser Family Foundation Vice President Larry Levitt said in a tweet.

The ruling allows the states to intervene in a lawsuit over the payments. It said, “The states have shown a substantial risk that an injunction requiring termination of the payments at issue here . . . would lead directly and imminently to an increase in insurance prices, which in turn will increase the number of uninsured individuals for whom the states will have to provide health care.”

Several governors from both parties have called on the administration to fully fund payments, The Hill reports. “A first critical step in stabilizing the individual health insurance marketplaces is to fully fund CSRs for the remainder of calendar year 2017 through 2018,” the group said.

Senate Majority Leader Mitch McConnell of Kentucky said when his last-ditch Obamacare-repeal bill died July 28 that he wanted alternative ideas from Democrats, but “Bailing out insurance companies without any thought of reform is not something I want to be part of.” Nevertheless, some bipartisan efforts have begun.

Sen. Lamar Alexander, R-Tenn., announced Aug. 1 that the Senate health committee he chairs would hold bipartisan hearings in September on how to repair the individual market. In the House, a bipartisan group of 40 lawmakers called the Problem Solvers Caucus endorsed an outline of ideas aimed at making urgent fixes to the law, CNN reports.

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