Health Insurers Make Case for Subsidies, but Get Little Assurance From Administration
Source: The New York Times
Health insurers pressed Trump administration officials on Tuesday to continue billions of dollars in subsidies for low-income people buying plans under the federal health care law, but left with nothing that would dissipate the fog of uncertainty hanging over the industry.
The insurers have been closely watching as President Trump and congressional Republicans and Democrats debate the future of those subsidies, known as cost-sharing reductions paid by the Obama administration that now go to the companies covering about seven million individuals to help lower deductibles and co-payments.
Insurers who attended Tuesday’s meeting with Seema Verma, the new Medicare administrator, “reiterated our most pressing concern: the instability in the individual market created by the uncertainty of funding,” according to a statement from America’s Health Insurance Plans, one of the main industry trade groups.
But Ms. Verma made no promises, according to accounts of the meeting, and indicated to the insurance executives that Congress would have to decide whether to appropriate the money.
Many insurers have already been anxiously pressuring lawmakers and the administration as deadlines loom in the coming weeks for setting next year’s rates and as they weigh leaving the federal marketplace altogether.
Congress returns next week to Washington, to immediately begin negotiating a spending bill or face a government shutdown.
The subsidies have become a sticking point in Congress, with some House Republicans steadfastly opposing how the Obama administration funded them, especially after winning a court case that is now on appeal.
White House officials said Tuesday that Mr. Trump had not made a final decision about whether the administration should withhold the subsidies from insurance companies next year. One White House official said this week that the president was leaning toward ending the subsidies, but was waiting to see how Democrats would respond when they return to Washington.
America’s Health Insurance Plans’s chief executive, Marilyn Tavenner, had warned late last week that discontinuing the subsidies would have far-ranging effects.
“Without funding, millions of Americans who buy their own plan will be harmed. Many plans will likely drop out of the market. Premiums will go up sharply — nearly 20 percent — across the market,” said Ms. Tavenner, who preceded Ms. Verma as the administrator of the Centers for Medicare and Medicaid Services under President Barack Obama, and had requested the meeting.
Unlike Mr. Trump’s meeting with major insurers in February, Tuesday’s session did not include the chief executives from some of the biggest companies, including Anthem, Aetna and UnitedHealth Group. Both Aetna and UnitedHealth Group have largely exited the market, but Anthem, which operates for-profit Blue Cross plans, is still a major player. Its chief executive has repeatedly warned that it will withdraw from some markets if the market appears unstable.
With such uncertainty four months into the year — amid the continuing efforts by Republicans to overturn Mr. Obama’s Affordable Care Act — some insurers say they are preparing two scenarios on prices that could soar to 30 percent rate increases.
While the Obama administration paid the subsidies that amounted last year to more than $7 billion, House Republicans successfully argued that payments made by the executive branch were unconstitutional. The decision has not taken effect while the case is being appealed, and the next court date is May 22.
Ms. Verma’s office would not elaborate on her meeting with the insurers, but said in a statement that “all parties came to the table committed to maintaining an active dialogue to improve care for patients and focus on long-term solutions that will fix the problems created by the Affordable Care Act.”
Aside from the subsidies, insurers raised other unresolved issues. Some have been particularly worried about whether the administration would decide not to impose the tax penalties people face if they refuse to sign up for coverage.
Without enforcing the mandate, healthier people might consider going without insurance, possibly resulting in a costlier pool of sicker patients. The Internal Revenue Service has said the current mandate essentially stays in effect, but it remains unclear how widely any fees have been collected.
Some insurers said they had struggled to make money selling policies under the law, and many companies dropped out of the state marketplaces.
This year, Humana announced it would stop selling policies in 2018, and Iowa’s Blue Cross plan and Aetna announced they would leave the state marketplace next year, leaving one insurer in most of the state’s counties.
But many of the remaining insurers say they are starting to turn the corner, and a Standard & Poor’s analysis released this month contradicted administration claims that the market was in a “death spiral.”
Filed Under: ACA/Health Reform