After the Senate voted down the repeal of the Affordable Care Act, President Trump said to “let ObamaCare implode, then deal” and threatened to end government payments to insurers that lower consumers’ out-of-pocket costs. For Congress to move forward from the July repeal process, the administration must stop trying to sabotage the health insurance market.
CSR Payments Lower Costs
As insurers finalize rates for next year by August 16, the Trump administration is threatening to end payments that lower costs for millions of Americans and help keep insurers in higher-risk markets. These cost-sharing reduction (CSR) payments allow insurers to offer silver plans with lower out-of-pocket costs, helping more people afford health care. On average, CSR payments lower deductibles for silver plans by $2,300 and out-of-pocket maximums by $3,800 (see table below). For the same monthly premium, consumers are able to receive plans that cover a greater portion of the services they need.
Cancelling CSR payments would force insurers to stop offering these lower-cost plans or to raise silver plan premiums by 19 percent on average to make up the difference. Higher costs will mean that more consumers cannot afford insurance, so insurers will lose customers. Insurers will pull out of the markets that are most vulnerable now, worsening access to health insurance particularly in rural and underserved areas. It’s an entirely avoidable series of domino effects.
Trump Administration Sabotages Markets
The Trump administration is still refusing to commit on whether they will honor these payments. According to Office of Management and Budget Director Mick Mulvaney, the administration is “looking at the cost-sharing payments on a month-to-month basis” without “a long-term commitment.” This lack of commitment increases costs for consumers and leaves Americans with fewer insurers to choose from next year.
The uncertainty alone is already starting to affect insurer decisions and consumer options. Certainty is necessary for businesses to make decisions, and without certainty, they weigh the risks of the worst-case scenario. These actions are directly influencing insurers’ decisions to exit insurance markets, leaving limited to no options for consumers. In June, Anthem cited political and regulatory uncertainty from Congress and the White House, including the lack of certainty of funding for CSR payments, in their decision to leave most Nevada counties.
Congress can begin to chart a new course by promoting a solution that will stabilize markets and expand meaningful, affordable coverage to more Americans, such as the Marketplace Certainty Act (S.1462) to make permanent these essential payments to help Americans access health care.
