The head of the California ObamaCare marketplace is urging the Trump administration to restore outreach funding to encourage people to sign up, warning of higher premiums if the step is not taken.
Peter Lee, the executive director of Covered California, wrote a letter to Health and Human Services Secretary Alex Azar on Wednesday calling on him to increase ObamaCare outreach funding.
In a controversial move, the Trump administration last year cut funding for advertising and outreach by 90 percent, drawing accusations from Democrats that the administration was sabotaging the law.
“The reality is clear: If the federal government maintains the current cuts in marketing and outreach, premiums will be higher than necessary, consumers will be hurt as a result and taxpayers will pay the price by supporting higher [than] necessary subsidies,” Lee writes. “This does not need to happen and can easily be avoided.”
Despite the cuts in outreach, 8.7 million people signed up for ObamaCare plans in the 39 states with federally run marketplaces in 2018, less of a drop than many feared from the 9.2 million the previous year.
The Trump administration said the small drop-off showed the cuts in outreach allowed them to get essentially the same result with less outreach spending.
But Lee warns that over the past two years, there has been a 9 percent drop in enrollment, and an even higher 40 percent drop among people signing up for the first time.
In contrast, enrollment has remained steady in the 11 states like California that run their own marketplaces and have kept up outreach spending.
Without an influx of new sign-ups, the remaining enrollees will tend to be sicker and cause higher premiums, Lee warns.
He warned that rising premiums could mean people are “increasingly priced out of coverage, in part because of policy decisions to pull back on marketing.”