Trump payments ‘critical’ to avoid consumer health disaster, NAIC says

In new letters in the last 24 hours, insurance regulators warn the Trump administration and U.S. Senate it is “critical” that they commit to pay billions of dollars that help health consumers — or insurers are likely to pull out or raise premiums across the country.

Trump administration budget director Mick Mulvaney

As The Palm Beach Post has reported, the average rate increase projected in Florida to make up for the money is 25 percent, among the highest in the nation.

A May 17 letter from top officials at the National Association of Insurance Commissioners tells Trump budget director Mick Mulvaney it is essential to commit to paying money that helps consumers cover co-pays and deductibles.

“On behalf of the nation’s state insurance commissioners, the primary regulators of U.S. insurance markets, we write today to urge the Administration to continue full funding for the cost-sharing reduction payments for 2017 and make a commitment that such payments will continue, unless the law is changed,” the NAIC letter said. “Your action is critical to the viability and stability of the individual health insurance markets in a significant number of states across the country.”

An attempt to seek comment from a White House spokeswoman was not immediately successful.

The House passed a bill to end the Affordable Care Act’s taxes and subsidies and replace them with a plan that gives states more say, but the Senate has only begun to consider it. In addition, a court hearing is expected next week in a House lawsuit that seeks to block the payments.

Trump threatened to withhold the cost-sharing payments in an effort to get Congressional Democrats to commit to paying for a border wall.

“I don’t want people to get hurt,” Trump said in April. “What I think should happen — and will happen — is the Democrats will start calling me and negotiating.”

When that didn’t work out, Trump tweeted  May 7,  “Republican Senators will not let the American people down! ObamaCare premiums and deductibles are way up – it was a lie and it is dead!”

The letter from NAIC president Theodore K. Nickel of Wisconsin and colleagues from Tennessee, Maine and South Carolina tells the administration and Congress there’s no time to wait to stabilize markets.

“The time to act is now,” the letter said. “Carriers are currently developing their rates for 2018 and making the decision whether to participate on the Exchanges, or even off the Exchanges, in 2018. Assurances from the Administration that the cost-sharing reduction payments will continue under current law will go a long way toward stabilizing the individual markets in our states while legislative replacement and reform options are debated in Congress.”

The average premium increase to make up for the loss of perhaps $7 billion to $10 billion in annual “cost-sharing” payments in Affordable Care Act markets has been projected at 19 percent nationally and 25 percent in Florida, according to Kaiser Family Foundation.

That’s assuming insurers even sign up for 2018 at all. Assurance the money will be there matters not just in 2017 but 2018, because insurers must decide by June 21 whether to file rates for 2018 and what premiums to charge.

Insurers have already begun pulling out in states including Iowa.

“As you know, there is increasing concern that more carriers will pull out of this market and rates will continue to rise, leaving consumers with fewer and more expensive options, if they have any options at all,” the NAIC letter to Mulvaney said. “This is not a theoretical argument – carriers have already left the individual market in several states, and too many counties have only one carrier remaining. The one concern carriers consistently raise as they consider whether to participate and how much to charge in 2018 is the uncertainty surrounding the federal cost-sharing reduction payments.”

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