By Joe Farkus, NDG Contributing Writer
The White House announced recently it will stop payments to health insurers that assists roughly six million lower-income Americans to afford coverage under the Affordable Care Act (ACA). President Trump signed the executive order on Thursday, which effectively ends cost-sharing reduction (CSR) subsidies that are paid to insurance companies to assist in lowering patients’ deductibles and co-pays.
“If you take a look at CSR payments, that money is going to insurance companies to prop up insurance companies,” Trump told reporters on the White House lawn Friday, Oct. 13. “That money is going to insurance companies to lift up their stock price, and that’s not what I’m about.”
If and when this decision is enforced, it will likely force insurance providers to leave the federal marketplace or raise premium rates to compensate for the loss of federal subsidies. The Congressional Budget Office (CBO) has already predicted that while ending these payments may save the government money in the short-term, it will increase costs to taxpayers by roughly $6 billion in 2018 alone. With numerous insurers dropping out of the program and the average insurance rate increasing an estimated 25 percent in Texas this year, Trump’s executive action is likely to acerbate the problem of high costs and limited options for patients.
With Blue Cross Blue Shield of North Carolina announcing a 14 percent rate increase on Wednesday, it remains unclear precisely how much damage the White House’s decision will have on insurance costs and options for Texas patients. As of this year, roughly one million Texans get their health insurance through the ACA and, according to the Kaiser Foundation, more than 60 percent of those are beneficiaries of the types of subsidies the President is attempting to end.
Despite the dire predictions, Trump appears to remain unconcerned tweeting on Oct. 13, “The Democrats ObamaCare is imploding. Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!”
While it’s unclear if a political strategy is the only reason he is making it more difficult for lower-income Americans to afford health coverage, it is clear the risk to their care is worth the possible benefit in his negotiating position with Congress. The White House is also arguing that without Congressional authorization, they would not be capable of making those CSR payments without violating the Constitution.
The Senate is currently working on alternative plan to help fund these subsidies, while at the same time legal challenges to Trump’s executive action have been issued from 18 state attorneys general plus the District of Columbia. Texas Attorney General Ken Paxton is not one of them.
With the Open Enrollment Period for 2018 coverage through the ACA beginning next week on Wednesday, Nov. 1, this latest announcement from the White House is sure to cause even more confusion and concern for Texans worried about gaining or retaining affordable coverage.
