Washington – President Donald Trump said Friday he will end payments reimbursing insurers for lowering out-of-pocket costs for the poorest Americans, provoking cries of Affordable Care Act “sabotage” from Democrats and ensuring health insurance rates will rise for many Americans next year.
“Let’s call this what it is – the president is intentionally hurting every American because he’s having a temper tantrum over Republicans’ unwillingness to repeal the Affordable Care Act,” said Sen. Chris Murphy. “Families in Connecticut will see their health care costs skyrocket because Donald Trump is having a bad week.”
Gov. Dannel P. Malloy called Trump’s action “vindictive and deliberately designed to sabotage healthcare insurance markets throughout the nation.”
“Premium costs will continue to rise each year, thereby putting healthcare out of reach for many people,” Malloy said.
Sen. Richard Blumenthal also joined a Democratic chorus in condemning the end of CSR payment.
“The President’s continued sabotage of the ACA is mean-spirited, rash, irrational – and apparently boundless,” he said.
The cost sharing reduction, or CSR payments, lower the cost of deductibles and co-payments for those who purchase “silver”-tiered individual policies on state ACA exchanges like Access Health CT and have an annual income that’s no more than 250 percent of the federal poverty level, about $30,150 for an individual.
About 44,000 Connecticut policyholders benefit from these deductions, which will continue because the subsidies are required by the Affordable Care Act. But the insurers will no longer receive a reimbursement from the federal government for their cost.
Trump has signaled for months that he might stop the payments, creating uncertainty in state insurance markets and leading the Connecticut Insurance Department to approve big rate hikes for insurers selling policies in the state next year. Trump decided to end the payments, which would bring insurers about $7 billion this year, about two weeks before the 2018 enrollment period begins on Nov. 1.
In anticipation of Trump’s move, for the 2018 enrollment period the Insurance Department approved an average rate hike for Anthem policies of 31 percent and an average increase in ConnectiCare premiums of 27.7 percent. Anthem and ConnectiCare are the two carriers that will sell policies on Access Health CT.
Individuals who qualify for another ACA subsidy that helps them pay their health insurance may not see much of an increase, if any at all, in their premiums. But those who don’t qualify for this subsidy and buy health coverage on the individual market – about 25,000 policyholders in Connecticut — will see a substantial premium hike, which analysts say will result in an increase in the uninsured as people are forced to drop coverage that’s not affordable.
While the Connecticut Insurance Department already had factored in a rate hike based on the possibility the CRS payments would end, there was, before the president’s actions, a possibility they could be reduced if the payments were guaranteed for the 2018 enrollment period by the president or Congress.
And Democrats say the increase in premiums won’t be limited to those who purchase insurance on the state ACA exchanges, but health care costs and premiums for everyone will go up as the number of uninsured rises.
Connecticut Attorney General George Jepsen on Friday joined a group more than a dozen attorneys general, including those from California, Kentucky and Massachusetts, in suing the Trump administration over the end of CSR payments.
Their lawsuit says the payments are mandated by the ACA and have been made since 2014. It also said the president violated the Administrative Procedures Act in ending the payments without first promulgating rules by a federal agency and seeking public comment.
Jepsen and the other attorneys general are seeking a temporary injunction from a federal court to make sure the October CSR payments, due on or around the 21st of the month, as well as subsequent monthly payments, are made.
Jepsen called Trump’s move “meanspirited” and said it “will result in real damage to working families.”
He said an expected increase in the uninsured would result in an increase in uncompensated care in Connecticut’s hospital and an “added burden” to the state.
In 2014 U.S. House Republicans filed a lawsuit against the Obama administration, saying it didn’t have the authority to make the CSR payments because Congress needed to appropriate the funding.
A federal judge sided with the House Republicans last year, saying the money needs to be disbursed by Congress. That ruling was appealed by the Obama administration.
But Department of Health and Human Services Acting Secretary Eric Hargan and Seema Verma, administrator of the Centers for Medicare and Medicaid Services, said in a statement that continuing the payments would violate “the legal boundaries drawn by our Constitution.”
At a Values Voter summit on Friday, Trump said he is seeking to dismantle the ACA “step by step” as a way to force Congress to replace the health care law signed by former President Obama in 2010.
Another “step” cited by Trump, besides ending the CSR payments, was this week’s use of an executive order to allow more consumers to buy health insurance through association health plans across state lines.
The move would allow small businesses and other groups to pool their resources into associations that could use its purchasing power to buy group plans for their employees.
However, these association plans could be less regulated and lack the minimum coverages required by the ACA. Obamacare advocates say a boost in association plans would reduce the number of healthy people buying individual health plans on ACA exchanges, further destabilizing them.
Other steps the Trump administration has taken to undermine the ACA include slashing advertising and outreach budgets aimed at bolstering enrollment in Obamacare plans, and planning outages of the federal website that serves 34 states.
“One by one it’s going to come down, and we’re going to have great healthcare in our country,” Trump said.
Trump’s moves this week undercut a bipartisan effort in the Senate by Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., to find a short-term way to stabilize the ACA markets and make insurance more affordable.
Their effort included putting into law the CSR payments, which are now made through executive authority by the Department of Health and Human Services.
But Alexander said he has had a tough time convincing some GOP senators to agree to requiring the payments, even for only a year or two.