Healthcare industry organizations have ramped up efforts to lobby Congress to take action to continue the cost-sharing reduction subsidies for health insurers that President Trump moved to end last week.
Insurers and the U.S. Chamber of Commerce sent a joint letter to leaders of the House and Senate urging lawmakers to take immediate action to continue funding the subsidies.
Last week, Trump continued efforts to undermine the Affordable Care Act, signing an executive order to expand health insurance options for some Americans. However, some critics say the approach could undermine coverage for those who rely on Obamacare coverage. That was followed by his announcement that he would no longer authorize the CSR payments.
Insurers use the subsidies to help pay for the premiums of individuals who can’t fully afford insurance coverage. For example, if a person has a $2,000 deductible, a subsidy may take that down to $500 and the insurer gets reimbursed by the federal government for the cost of assuming a portion of the individual’s out-of-pocket spending, lessening risk to insurers.
In addition to the Chamber, the stakeholders signing on to the letter to Congress included America’s Health Insurance Plans, BlueCross BlueShield Association, American Benefits Council, American Academy of Family Physicians, American Hospital Association, American Medical Association and the Federation of American Hospitals.
“The administration’s decision to end this essential support for millions of Americans will have harmful consequences for patients, families, businesses and taxpayers,” the groups told Congress. The executive order, they further assert, will drive up insurance premiums and deny health insurance choices for consumers, with some regions having no insurance coverage at all. Finally, the letter noted that eliminating the CSRs will actually increase federal spending by $194 billion during the next decade, according to estimates from the non-partisan Congressional Budget Office.
Without subsidies to reduce out-of-pocket costs as premium rates increase, the associations fear nearly 6 million low-income Americans would not be able to afford their medical expenses and get needed care.
Reductions in coverage of that scope would result in significant financial and budgeting consequences for hospitals and other provider organizations, which could imperil capital projects such as new health information technology initiatives, upgraded radiology systems, or a new wing at a hospital.
Individual insurers continued to react to the administration’s actions on Monday, citing potential impacts to the health industry and individuals’ healthcare.
Andrew Dreyfus, President & CEO of Blue Cross Blue Shield of Massachusetts, released the following statement:
"We are deeply concerned that the Administration's recent actions will create further instability in the insurance market and threaten our shared goal of providing affordable and quality coverage and care to everyone, regardless of economic status, age, or condition,” said a statement by Andrew Dreyfus, President and CEO of Blue Cross Blue Shield of Massachusetts.
“The measures proposed by the Administration would likely create an unfair and unstable market, making coverage out of reach for those who need it most and undermining the meaningful progress that our state and nation have made in extending health insurance coverage to our fellow citizens,” Dreyfus added.
In another statement, Blue Shield of California affirmed its commitment to “providing Californians with all the benefits they are entitled to under the Affordable Care Act despite the elimination of cost sharing reductions (CSR) that lower deductibles, copayments and out-of-pocket limits for more than 6.4 million low-income enrollees who otherwise would be unable to afford the care they need.”
The California Blues plan noted that CSR payments go directly to helping individuals access needed care “and do not benefit the bottom line of insurers.”
Even so, other industry experts note that it’s difficult to assess how the administration’s actions could affect care delivery and individuals’ access to care.
For example, Christopher Condeluci, a health law attorney and principal at the law firm of CC Law & Policy in Washington, suggests there is a counter-intuitive outcome that may arise as effects from the cutting of subsidy payments may not be as widespread as the Trump Administration envisions. He contends that the executive order could actually improve and continue the insurance exchanges.
There are several different types of health plans available on federal and state sites, Condeluci explains. These include the Bronze plan, the Silver plan, the Gold plan and the Platinum plan. Most healthcare consumers cannot afford the Gold and Platinum plans, leaving Bronze and Silver to the masses.
While insurers look to increase the premiums for their plans to make up for the lack of CSR (subsidy) payments, Condeluci predicts states will only allow insurers to increase the premiums of Silver exchange plans, as those are the only exchange plans actually eligible for the subsidies.
That means individuals won’t be thrown off insurance so providers should not be impacted because patients will continue to have insurance and deductibles will be lower because current law requires insurance companies to keep reducing the deductible. Consequently, he doesn’t foresee negative effects for providers and there won’t be disruptions in IT projects and other initiatives.
For now, however, there remains peril for providers, according to Bill Spooner, former veteran CIO at Sharp Healthcare and now a consultant. “Cutting the subsidies will certainly have a negative impact on provider bottom lines,” he says. “Since ACA took effect and the uninsured population declined, providers have experienced less charity care. Armed with insurance coverage and the ACA liberal definition of essential coverage, patients have had greater access to care and providers have increased revenue. Some of this increase will go away if people drop coverage absent the subsidy.”
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