President Trump actions cause an increase in health insurance costs to the American people.
President Donald Trump’s decision to cut off billions of dollars owed to health insurance providers under the Affordable Care Act caused those companies to substantially increase premiums to cover their losses, according to an analysis. This ripple effect impacts many Americans across the nation.
Enrollment on health insurance exchanges like HealthCare.gov began on November 1 and runs until December 15 in most states; a few have later deadlines. Consumers who use these exchanges or purchase their coverage directly from a health insurance company or through a broker can expect to see large rate hikes when they shop for plans. Prices already were set to rise before Trump’s action exacerbated the problem.
Trump’s action caused premium increases that range from 7 percent to 38 percent higher than they would have been for mid-level “Silver” health plans, the Kaiser Family Foundation reported. The analysis includes numerous examples of how specific insurers dealt with Trump’s decision to deny their reimbursements, based on information they provided to state insurance agencies.
Additionally, Trump halted payments to health insurance companies serving low-income customers. These so-called cost-sharing reduction payments are intended to reimburse insurers that provide discounts on out-of-pocket costs for people earning up to 250 percent of the federal poverty level, or $30,150 for a single person.
The Affordable Care Act requires health insurance companies to reduce deductibles and other forms of cost-sharing for eligible enrollees. The federal government is supposed to repay the companies for the expense but Trump decided to cut off those funds.
As a consequence, health insurance companies are set to lose an equivalent amount of money because they are still required to reduce eligible customers’ out-of-pocket costs.
Health insurance companies and most state governments anticipated that Trump might cut off this funding and adopted several strategies to prevent major financial losses and further disruption to the market. Some states and their insurers opted to only add supplementary premium increases to Silver plans, because those are the ones consumers must choose to receive discounts on out-of-pocket costs. Other insurers spread the increased costs across all types of insurance ― Bronze, Silver, Gold and Platinum ― either only on the exchanges or on and off the exchanges.
Trump’s decision does not affect the availability of these cost-sharing reductions or subsidies on premiums for those who qualify. The tax credit subsidies available to reduce monthly premiums for those earning up to four times the poverty line ― or $48,240 for a single person ― largely shield eligible enrollees from price increases because they grow along with the price of Silver plans.
For 2018, the average price increased 18 percent for Bronze plans, 34 percent for Silver plans, 16 percent for Gold plans and 24 percent for Platinum plans, according to the consulting firm Avalere Health. Across those 39 states, the average premium for a Silver plan ― by far the most popular option on the exchanges ― next year is $743. The average prices for Bronze, Gold and Platinum plans next year is $561, $831 and $1,125, respectively.
Having health insurance isn’t just a good idea, it’s the law. If you are not covered, you’re going to pay a tax penalty – unless you can qualify for a special enrollment period. To learn more about your insurance options, contact Donald Weiss Insurance Services today!
