Trump’s latest effort to dismantle Obamacare has led 18 states — including Washington — to sue to keep subsidies that reduce health insurance costs for some consumers. The president says Obamacare is failing.
More than 70,000 Washingtonians will face higher health-insurance costs because of President Donald Trump’s decision to halt Affordable Care Act (ACA) subsidy payments to insurers, state officials said Friday.
Trump’s orders, announced late Thursday, “are certain to result in higher premium payments for consumers and will force our insurers to determine whether they will remain in an unstable market,” said state Insurance Commissioner Mike Kreidler.
State Attorney General Bob Ferguson joined an 18-state lawsuit seeking to force the Trump administration to continue the subsidies. The lawsuit coalition includes several states that voted for Trump such as Pennsylvania, North Carolina and Kentucky.
After failed GOP efforts to repeal and replace the ACA, eliminating the subsidies is Trump’s latest move to dismantle the law known as Obamacare. One Republican member of the state’s congressional delegation indicated a willingness to negotiate a way to keep premiums from spiking. Democrats reacted with outrage.
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U.S. Sen. Maria Cantwell said Trump is “throwing insurance markets into chaos,” while Gov. Jay Inslee called it a deliberate attempt to sabotage health care.
“After months of failed repeal votes in Congress, the president is now clearly determined to repeal health care for millions by executive action,” Inslee said.
Kreidler, Ferguson, Cantwell and Inslee are Democrats.
Of the state’s four Republican members of Congress, only Rep. Jaime Herrera Beutler responded to a request for comment Friday.
“A federal court ruled that these payments were illegal as structured under the Affordable Care Act, which was yet another problem with this flawed attempt to address Americans’ health care,” Herrera Beutler said in a statement.
“My goal is to ensure Southwest Washington residents not only have better health-care options than what Obamacare left them with, but that their health plans are not further disrupted, so I would carefully consider the details of any proposal to ensure that happens.”
Congress could decide to fund the subsidies, known as cost-sharing reductions or CSRs.
Uncertainty about whether Trump would continue the subsidies to insurers had played a central part in proposed rate hikes next year in the state. Statewide, those increases average 22 percent, according to the Office of the Insurance Commissioner.
The cost-sharing subsidies allow insurance companies to reduce some consumers’ out-of-pocket expenses, such as deductibles and co-payments. Trump and other Obamacare critics called the subsidies a giveaway for insurance companies.
Ending subsidies will further increase rates for affected Washingtonians by 9 to 27 percent, said Stephanie Marquis, spokeswoman for the insurance commissioner’s office. Those hikes will likely cause some consumers to drop insurance, Marquis said. Others may opt to buy less expensive “bronze” plans.
Those most affected are lower-income people who don’t get insurance through their employers and buy it on the Washington Health Benefit Exchange, the ACA marketplace for individual insurance.
More specifically, consumers who make between 138 and 250 percent of the federal poverty level and buy so-called “silver” plans on the exchange will be hardest hit, Marquis said.
The poverty level changes with the number of people in a household. For individuals, the income range for such subsidies is $16,643 to $30,150 a year. The subsidies are available for silver plans, which are not the least or most expensive under ACA policy. People below 138 percent of the poverty level qualify for insurance through Medicaid and are not directly affected by Trump’s decision.
Other consumers, whose incomes are higher than 250 percent of the poverty level, will also see increases as insurers raise rates for silver plans. Kreidler’s office doesn’t yet have an estimate of how many of those consumers will enroll in silver plans.
Federal law requires insurers to still provide subsidies. But under the Trump order they would no longer receive federal reimbursement, which amounted to $65 million in Washington last year. Hence the additional rate increases.
Subsidies lowered out-of-pocket costs by about $1,000 for each person nationally. The Congressional Budget Office estimated earlier this year that stopping the subsidies would lead to 1 million people nationally becoming uninsured next year and insurance prices increasing 20 to 25 percent.
The subsidies are under a legal cloud because of a partisan dispute over the wording of the health law.
The law requires insurers to reduce costs for low-income people, and it specifies that the government must reimburse the companies. But Republicans and the Trump administration say the law failed to include a congressional appropriation, a specific instruction to pay that’s required by the U.S. Constitution before federal money can be spent.
A federal-district court judge agreed with Republicans, but the Obama administration appealed last year. The dispute remains unresolved and the government had continued to make monthly payments.
Trump had been threatening for months to stop the payments. Apparently he decided to bring things to a head, to force congressional Democrats to negotiate on a new health-care law.
Kreidler and the state exchange approved two sets of rates for silver plans, anticipating the possibility of Trump’s decision.
Consumers will be able to see rates when open enrollment begins Nov. 1.
The exchange produced estimates of what monthly premiums would be for a 40-year-old, nonsmoking King County resident with the lowest-priced silver plan.
For Premera Blue Cross customers, monthly premiums would go from $406 this year to $529 in 2018, an overall 30 percent increase; 10 percent of that would come from Trump stopping the insurer subsidies.
Molina Healthcare consumers would see premiums rise from $253 to $385, according to the exchange, with 12 percent of the increase attributable to unfunded subsidies.
Kaiser Foundation Health Plan of Washington premiums would jump from $276 to $404 next year, with 23 percent of that due to ending the subsidies.
Some insurers could pull out of the state, said Marquis, of the insurance commissioner’s office. But that would mean they couldn’t come back for five years. “That’s a big deal,” she said.