Health Insurers Get More Time to Calculate Increases for 2018

The Trump administration is giving health insurance companies more time to calculate price increases for 2018 because of uncertainty caused by the president’s threat to cut off crucial subsidies paid to insurers on behalf of millions of low-income people.

Federal health officials said the deadline for insurers to file their rate requests would be extended by nearly three weeks, to Sept. 5.

The extension was announced in a memorandum that insurers received on Friday from the federal Centers for Medicare and Medicaid Services, which runs the federal insurance marketplace and regulates insurers under the Affordable Care Act.

It was the clearest evidence to date that the politics of health care in Washington could disrupt planning for 2018. Insurers are struggling to decide whether to participate in the marketplace next year and, if so, how much to charge.

In addition to the usual price increases to keep up with medical inflation, many insurers are demanding higher rates because of the possibility that President Trump might take away the subsidies known as cost-sharing reduction payments. The subsidies compensate insurers for reducing deductibles, co-payments and other out-of-pocket medical costs for low-income people.

Mr. Trump has repeatedly threatened to cut off the payments as a way to force Democrats to negotiate over the future of the Affordable Care Act.

The president can stop the payments because a federal judge ruled last year that the Obama administration had been illegally making the payments in the absence of a law explicitly providing money for the purpose. The Obama administration appealed the ruling, and the payments continue from month to month, with permission from the court. But Mr. Trump could drop the appeal and stop the payments at any time.

In its latest bulletin, the Trump administration said that many state insurance commissioners had allowed insurers to increase rates for 2018 to account for the “uncompensated liability” that they might face for the cost-sharing reductions.

The amount of the increases varies, but many insurers say that prices will be 15 to 20 percent higher next year because they do not know if they will receive the subsidies they are anticipating.

The future of the subsidies has been uncertain since Republican efforts to repeal major provisions of the Affordable Care Act collapsed last month in the Senate, where three Republicans joined all Democrats in voting down a proposal drafted by the majority leader, Senator Mitch McConnell of Kentucky. Mr. Trump chided Mr. McConnell for the failure and urged him to keep trying.

The impasse is already taking a toll.

“Planning and pricing for A.C.A.-compliant health plans has become increasingly difficult due to a shrinking and deteriorating individual market, as well as continual changes and uncertainty in federal operations, rules and guidance, including cost-sharing reduction subsidies,” one of the nation’s largest insurers, Anthem, said last week in explaining its decision to curtail its participation in the individual market in Nevada and Virginia.

Congress could reduce the uncertainty and stabilize insurance markets by providing money for the cost-sharing subsidies — a step supported by doctors, hospitals, insurers, consumer groups, the United States Chamber of Commerce and the influential chairmen of three congressional committees: Senator Lamar Alexander of Tennessee and Representatives Kevin Brady of Texas and Greg Walden of Oregon, all Republicans.

Some lawmakers, however, want to offset the cost of the subsidies, estimated at $7 billion to $10 billion next year, perhaps by cutting other health programs. Moreover, many Republicans criticize the subsidies as a bailout for insurers and say they will not provide the funds unless Congress also takes steps to reduce insurance costs and cut back federal regulation of the industry.

Lawmakers plan to return from their summer recess on Sept. 5, so they will not provide any definitive guidance before insurers file their rates on the same day.

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