I recently wrote about the Trump administration’s efforts to undermine the Affordable Care Act (ACA) health insurance marketplace. Today, as many citizens begin the Open Enrollment Season to sign up for 2018 health insurance, we are discovering just how drastically Trump and his Republican allies in Congress are hurting Americans by actively trying to destabilize the health insurance market in order to kill the ACA.
Insurance Rates Roller Coaster
Insurance companies have to set their premiums, or “rates,” many months before the Healthcare.gov exchange opens, because state agencies (in Virginia, the Bureau of Insurance, which is a division of the State Corporation Commission) must review insurers’ plans and proposed rates in the summertime to meet federal deadlines. As you probably recall, during the first eight months of 2017 Congress tried several times to repeal the ACA. Trump used his Twitter account to agitate for repeal, even threatening Representatives and Senators who did not fall into line with his desire to get rid of “Obamacare.”
He also actively sabotaged a crucial ACA tool that has kept premiums lower by threatening to eliminate the cost-sharing reduction (CSR) payments to insurance companies that helped families afford coverage. Faced with so much uncertainty and increased risk, health insurers began to withdraw their participation in some markets, and requested approval of significantly higher premiums for many of their ACA-compliant policies. [Read more…]
Trump’s consistent threat to withhold the subsidies (CSRs) which allow insurance companies to keep premium increases to a minimum became reality last week with his Executive Order. The result should surprise no one; faced with unpredictable markets and increasing costs, health insurance companies will either abandon offering coverage or increase premiums to cover their risk. The no-subsidy threat alone has had serious effects. In Virginia, for example, Anthem pulled out of the marketplace in August, leaving more than 60 jurisdictions with no insurer offering coverage. It was only after intense political pressure from Gov. McAuliffe and others that Anthem jumped back in, but premiums are expected to rise. Now that the administration is definitely reneging on federal payments, the reality will be devastating. Some 240,000 Virginians bought health insurance supported by ACA-mandated subsidies; their costs will rise and some will simply not re-enroll, thereby creating a so-called “death spiral” in the markets. 