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Posts Tagged ‘cost sharing reduction subsidies’

401 percenters face another year of double digit premium hikes — with likely political consequences

June 21st, 2017 No comments

ASHEVILLE, N.C. — Jane and Abe Goren retired here five years ago to escape the higher cost of living they had abided for decades in the suburbs of New York City. They did not anticipate having to write monthly checks for health insurance that would exceed their mortgage and property taxes combined. Ms. Goren, 62, is paying nearly $1,200 a month for coverage through the individual insurance market (her husband, 69, is on Medicare) and accumulating enough debt that her sons recently held a fund-raiser to help. For next year, her insurer, Blue Cross and Blue Shield of North Carolina, has proposed raising premiums by an average of 22.9 percent, a spike it is blaming squarely on President Trump.

Source: Middle Class, Not Poor, Could Suffer if Trump Ends Health Payments – The New York Times

The Gorens are part of what I’ve dubbed the 401 percenters — households with modified adjusted gross incomes in excess of the 400 percent of federal poverty cutoff for advance premium tax credit subsidies offered via state health benefit exchanges. For plan year 2018, the likely loss of reduced cost sharing reduction (CSR) subsidies for households with incomes between 100 and 250 percent of poverty levels is being blamed for another round of double digit premium increases. The cost sharing subsidies are tied up in litigation over which branch of the federal government has authority to allocate the CSR funding to health plan issuers.

There’s bound to be a political blowback in next year’s mid-term elections over steep premiums in the non-group segment, particularly among voters older than 50 but under age 65 and not yet eligible for Medicare, a demographic with strong voter turnout.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Administration, Congress would leave CSR subsidies in limbo in latest court filing

May 22nd, 2017 Comments off

President Donald Trump and House Republicans have decided not to blow up the Obamacare health insurance markets just yet. In a filing to a federal appeals court Monday, the Justice Department and lawyers representing House Republicans have requested another 90-day delay in the proceedings from a case challenging the legality of payments made to health insurers serving low-income customers. “The parties continue to discuss measures that would obviate the need for judicial determination of this appeal, including potential legislative action,” attorneys for both parties wrote to the appeals court.

Source: Trump Decides Not To Blow Up Obamacare — Yet | HuffPost

If the U.S. District Court of Appeals grants this request, the legal uncertainty over the reduced cost sharing subsidies for silver actuarial value (AV) plans sold in state health benefit exchanges would potentially continue for the rest of the summer. As the article notes, those subsidies could be cut off at any time by the Trump administration and an appeal in the case, House v. Price, dropped. That would leave intact a U.S. District Court ruling one year ago finding the subsidies cannot be allocated by the executive branch without congressional appropriation. Neither the Trump administration nor the current Congress are committed to keeping the exchange market functional and have little motivation to resolve the matter.

These circumstances will likely prompt plan issuers to increase plan year 2018 premium rates as a precaution as rate filings are due to state regulators in the next month since the Affordable Care Act would continue to require them to offer more generous coverage than standard 70 percent AV silver plans for households earning below 250 percent of federal poverty levels and purchasing though the exchanges. At least one plan issuer, Anthem, has indicated it would have to boost premiums by at least 20 percent to cover the potential loss of the CSR subsidies.

A second consecutive year of double digit premium increases could threaten the actuarial viability of the state non-group market risk pools since those eligible for little or no advance premium tax credit subsidies would likely flee the market. Particularly if the Trump administration doesn’t enforce the ACA’s individual mandate, making that option more appealing.

Some state regulators including California and most recently New Mexico have asked plan issuers to file two sets of premium rates, one assuming continuation of the subsidies and another without them.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Loss of ACA cost sharing reduction subsidies means higher spending on premium assistance, California exchange analysis finds

April 17th, 2017 Comments off

SACRAMENTO, Calif. — Covered California on Friday shared with the Congressional Budget Office (CBO) an analysis that shows that a decision not to provide ongoing direct federal funding for cost-sharing reductions would have immediate and dramatic effects on rates, federal spending and the viability of exchanges across the nation.“The impact of not providing direct federal funding of cost-sharing reductions is enormous, and not only puts the viability of the individual market in many states in peril, but would be a bad deal for the federal budget — costing more than $47 billion over the next 10 years,” said Peter V. Lee, executive director of Covered California.“Without the direct federal support for cost-sharing reductions, some health plans will leave the individual market entirely, and those who stay will raise rates significantly,” Lee said. “While the market in California is likely to be relatively stable, for other states there is grave uncertainty. But what is certain is that not funding cost-sharing reductions would actually cost the federal government billions more because of the interplay between rising premiums and subsidies.”

Source: Covered California Daily News: Options to Stabilize the Individual Market Can Reduce Federal Spending and Lower Premiums

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Congress holds trump card on exchange cost sharing reduction subsidies (pun intended)

April 13th, 2017 Comments off

In the coming weeks, the Trump administration will need to say clearly whether they plan to fund cost-sharing reductions — payments that reimburse insurers for providing discounted deductibles to low-income ObamaCare enrollees. In an interview with The Wall Street Journal Wednesday, Trump said he was considering withholding the payments to force Democrats to work with him on healthcare.

Source: Trump faces risky ObamaCare choice | TheHill

Actually Congress — and not the Trump administration — holds far more power to resolve the outstanding issue of funding for cost sharing reduction subsidies for plans sold on state health benefit exchanges that’s giving non-group health plan issuers heartburn as they prepare for plan year 2018.

First because the House of Representatives brought the underlying litigation over the constitutionality of the Obama administration’s funding of the subsidies. It as petitioner — and not the executive branch as respondent — can make the litigation go away by dropping it. A federal district court that decided the case in favor of the House last May put its ruling on hold, giving the House the option to drop the case.

Second because Congress holds the power of the purse. It ultimately decides whether funds for the subsidies are appropriated, not the administration.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

State health benefit exchanges not out of the woods yet

March 28th, 2017 Comments off

State health benefit exchanges dodged a legislative bullet last week that would have eliminated advance premium tax credit (APTC) subsidies to help low and moderate income households purchase non-group coverage. The nation’s largest exchange, Covered California, estimated the tabled budget reconciliation bill replacing the subsidies with an age-based tax credit beginning in 2020 would on average amount to only 60 percent of that provided under the APTC subsidies. That would have made coverage for less affordable for many households and potentially led to a dramatic drop in enrollment qualified health plans sold on the exchanges, shrinking the non-group risk pool and reducing spread of risk.

The exchanges now face a more immediate threat that could significantly disrupt plan year 2018 and potentially current year enrollees: the loss of cost sharing reduction (CSR) subsidies for silver level plans sold on the exchanges. The subsidies are available to households earning between 100 and 250 percent of federal poverty levels. By reducing out of pocket costs for eligible households, the subsidies effectively increase the actuarial value of silver plans that cover on average 70 percent of medical care costs.

A U.S. District court ruling issued last May found the Obama administration acted unconstitutionally in funding the subsidies without an explicit appropriation by Congress. The decision was put on hold pending appeal, where it sits pending possible action to resolve the underlying fiscal issue by the Trump administration and Congress. Without federal funding for the CSR subsidies, health plan issuers participating in the exchanges would incur billions in losses, according to an analysis prepared earlier this month by The Commonwealth Fund. There is no requested appropriation to cover the CSR subsidies in the Trump administration’s 2018 budget blueprint. As last week’s failed attempt to advance the budget reconciliation legislation illustrates, the Trump administration and Congress are unlikely to achieve a rapid agreement resolving the litigation as they struggle to form a majority party governing coalition.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

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