President Donald Trump’s decision to end a provision of the Affordable Care Act that lowered out-of-pocket medical costs brought swift reaction Friday from the states, as health officials and consumers said they feared the action could chase millions of Americans away from coverage.
Attorneys general in nearly 20 states, including Washington, said they planned to sue the Trump administration to keep the money flowing, contending that the president is not following a legal requirement to pay the subsidies.
“This is a president who seems set on enacting reckless, unlawful campaign promises no matter the harm to families in America,” Massachusetts Attorney General Maura Healey said during a conference call.
At issue is a federal subsidy for deductibles and co-pays that helps lower costs for consumers with modest incomes. The Trump administration and many Republicans say the government cannot legally continue to make the so-called cost-sharing payments.
State officials say ending the subsidies will make insurance premiums skyrocket, forcing some consumers to give up having coverage at all.
County residents with silver plans will pay morePresident Donald Trump's decision to eliminate funding for cost-sharing reductions will result in higher premiums for Clark County residents with silver health plans.
Last month, the state insurance commissioner and the Washington Health Benefit Exchange -- which operates the state-based exchange, Washington Healthplanfinder -- announced an average 24 percent increase in health plan costs for 2018. The announcement came with a caveat. If funding for cost-sharing reductions was eliminated, the state insurance commissioner had approved even higher rates for silver plans.
The cost-sharing reductions, or CSRs, are subsidies to health insurance companies to help offset the cost of providing plans to low- and moderate-income people. The Affordable Care Act requires insurance companies to discount out-of-pocket costs to customers who qualify for CSRs in silver plans. The president's decision to eliminate the CSRs means insurers will increase costs to make up for that shortfall. (The decision does not affect the cost of bronze, gold or catastrophic plans.)
In Clark County, that means residents with silver plans will see increases ranging from $38 to $66 per month.
For example, a Kaiser Foundation of the Northwest silver plan with a $3,500 deductible was set to cost $351 to $369 per month. With the elimination of the CSRs, the monthly premium will now be $414 to $435.
LifeWise Health Plan of Washington's silver plan with a $4,000 deductible was going to cost $354 to $406 per month. Now, the premium will be $405 to $464 per month. And the monthly premiums for Molina Health Care of Washington's silver plan with a $4,950 deductible are increasing from $324 to $373 with the CSRs to $362 to $416 without the payments.
State Insurance Commissioner Mike Kreidler called the president's decision a "devastating blow" to Washington residents and said the action threatens the stability of the individual health insurance market.
"The president's short-sighted decision, combined with his executive orders announced Oct. 12, 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," Kreidler said in a news release. "Consumers and insurers are at great risk of harm because of the president's actions."
Kreidler said he's considering action to challenge the decision.
Sen. Patty Murray, a top Democrat on the Senate health committee, called the president's decision reckless and spiteful.
"This pattern of governing by sabotage only makes it more critical that Congress show patients and families we can work together to undo the damage President Trump is causing," Murray said in a news release. "I continue to be optimistic about our negotiations and believe we can reach a deal quickly -- and I urge Republican leaders in Congress to do the right thing for families this time by supporting our work."
Democrat Sen. Maria Cantwell said she too remains committed to enacting bipartisan policies to bring down costs. The president's action, she said, "takes us in the opposite direction."
"President Trump is doubling down on throwing insurance markets into chaos," Cantwell said in a news release.
- Marissa Harshman
“Scared, anxious and worried,” said Carmen Parra, a 64-year-old Miami nanny when asked for her reaction to Trump’s decision.
The federal cost-sharing payments cover nearly 95 percent of her deductible and co-pay costs. For example, she pays just $2 each for blood pressure and asthma medications, and an urgent care visit for one asthma attack costs just $15.
Without the subsidies, Parra said she could be forced to go without insurance. Her state has led the country in insurance enrollment under the Affordable Care Act, nearly 1.7 million consumers signing up for coverage. About three-fourths of them receive federal subsidies of some kind.
“Please consider the people who need this assistance so they can live. Our lives depend on it,” Parra said in Spanish through a translator.
Trump’s announcement Thursday came weeks after the failure of the latest Republican attempt to repeal former President Barack Obama’s Affordable Care Act. It’s less than three weeks before the start of open enrollment, when many Americans who do not have health insurance through their employers can start picking their plans.
The payments to insurance companies are a major piece of Obama’s overhaul, which extended coverage to low- and moderate-income people in multiple ways. More than 6 million people benefit from the cost-sharing subsidies, which cost the federal government about $7 billion a year. That cost is expected to more than double within a decade.
Cost-sharing is aimed specifically at people who buy coverage on government run exchanges and make between 100 and 250 percent of the federal poverty level — between about $12,000 and $30,000 for single people.
The program is distinct from two other major subsidies provided under the Affordable Care Act that were not affected by Trump’s order. One has the federal government picking up most of the cost to expand Medicaid to a larger group of low-income people in states that chose to participate. The other gives tax credits to most people who buy individual coverage on the government-run insurance exchanges to help lower their monthly premium costs.
Trump’s decision to end the funding immediately may have been a surprise, but he’s been considering cutting the payments for months. A group of Democratic state attorneys general — already fighting Trump policies on many other fronts — had earlier this year entered the legal battle to try to preserve the cost-sharing measures. But insurers in several states set their rates for offerings on the exchange for 2018 assuming the subsidies would vanish by then.
In Wisconsin, officials said Thursday — just before Trump’s announcement — that the expected cuts were a major reason the premiums for plans on the exchange were jumping by an average of 36 percent. Sen. Tammy Baldwin, a Democrat, called it “sabotage of the health care market” by the president.
Gov. Scott Walker, a Republican, placed the blame on the system that Trump is deconstructing.
“Obamacare has failed to deliver on its promise of affordable health care year after year,” said his spokesman, Tom Evenson.
A study from the Kaiser Family Foundation earlier this year found that premiums for “silver” plans on the health care exchanges would go up by an average of 19 percent to offset the loss of the deductible and co-pay subsidy. In states where rates have been announced, there’s been a wide variation, even among insurers expecting the cuts. In Arizona, for instance, average premiums on the exchange are rising by less than 2 percent for one company and will go down by 1 percent for another.
Even as they sue, many officials are still advising consumers to buy coverage under the exchanges after enrollment opens Nov. 1.
The timing of Trump’s announcement just before that period concerns those who advocate for continuing the cost-sharing subsidies.
“His effort to gut these subsidies with no warning, or even a plan to contain the fall-out, is breathtakingly reckless,” New York Attorney General Eric Schneiderman said Friday.
New York and California are among the states filing the lawsuit in federal court in California. Others joining the action are: Connecticut, Delaware, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington and the District of Columbia.
The subsidies are essential for many health care consumers.
Dawn Erin, a 46-year-old massage therapist in Austin, Texas, is among them. After going nearly two decades without insurance, she now has coverage through the federal marketplace. That’s what covers her $70,000 annual bill for drugs to treat hepatitis C, as well as appointments with specialists.
“I’m disgusted but not surprised,” Erin said Friday about Trump’s decision to end the payments. She said the president “wants to scribble his name on anything that will take apart anything with Obama’s name on it.”
She now fears she might have to return to having no insurance and rely instead on sporadic charity care.