Federal government makes major announcements about health insurance
The Trump administration made two major decisions yesterday that have the potential to fracture the health insurance market and jeopardize care for millions of patients.
The first decision, made by executive order, looks to expand the use of association and short-term health insurance plans. "Expanding association health plans and short-term health insurance without ACA protections will fracture the individual and small group markets," said Insurance Commissioner Marguerite Salazar in a statement. "The limited benefits, the focus on the healthy at the expense of those with pre-existing conditions, and lack of regulatory oversight will cause problems for the health insurance market as a whole."
Association plans do not have to follow most insurance regulations and face only limited oversight, especially concerning financial solvency, Salazar said. And cheaper, less comprehensive short-term plans may be able to exclude people with pre-existing conditions and focus on healthy individuals, creating an imbalance in the insurance market. At this time it appears that the executive order will not impact open enrollment for 2018. Read the full DOI statement here.
The second decision, to end cost-sharing reduction (CSR) payments to insurers after December 2017, was announced late last night. CSR payments are used to reduce deductibles and co-payments for low-income enrollees in the marketplace plans created under the Affordable Care Act. The reductions currently cost insurers around $7 billion annually. The Kaiser Family Foundation estimates that insurers will have to raise premiums for silver plans (for people who make who make up to 250% of the federal poverty level) by an average of 19 percent nationwide to make up for the loss.
"For months now, the president has hinted that he would discontinue these payments. Because of those threats, this past summer the DOI had Colorado health insurance companies submit two sets of rates for their 2018 plans, one that assumed the CSRs would continue to be funded, and another set that were based on the CSRs not being funded," the DOI said in a separate statement.
Now that the Trump administration is purposefully making people pay more for their health insurance, the DOI will move to the non-CSR-funded rates. These rates have already been reviewed by the DOI, and today the division is pushing the new premiums to Connect for Health Colorado so they can be loaded into its system. The Division’s plan is that open enrollment will continue as scheduled, Nov. 1 - Jan. 12.
"The overall average increase that the non-CSR-funded rates will add to the 2018 premiums will be 6 percent. All of the companies that submitted CSR-funded rates for 2018 submitted non-CSR-funded rates, so while premiums will change, the insurance companies will remain the same as announced in September."
The AMA issued a statement expressing their deep discouragement. "Republicans and Democrats alike have expressed concern about the affordability of health care coverage under the ACA, and bipartisan efforts have been underway in Congress to provide the specific authorization and funding for CSR payments to address the legal issues involved," said AMA President David O. Barbe, MD. "This most recent action by the Administration creates still more uncertainty in the ACA marketplace just as the abbreviated open enrollment period is about to begin, further undermining the law and threatening access to meaningful health insurance coverage for millions of Americans."