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Delay, delay, delay means Obamacare customers will pay, and pay, and pay a lot more next year.
The Trump administration's move Monday to avoid for 90 days — yet again — making a decision on a major court challenge to key Obamacare subsidies paid insurers by itself will add up to 20 percent or more to the price of individual health plans next year, experts said Monday.
Andy Slavitt, who until January oversaw Obamacare for the federal government, told CNBC that President Donald Trump has guaranteed higher insurance prices in 2018 by his indecision on what will happen to the $7 billion in subsidies insurers have counted on from the government.
"By not choosing, he's choosing," said Slavitt, former acting administrator of the federal Centers for Medicare and Medicaid Services.
Slavitt on Monday tweeted that a "19% Trump surcharge will be baked into 2018 premiums," which are being proposed in coming weeks because insurers will factor the uncertainty about the subsidies into their plan prices.
Slavitt also said that the uncertainty over the fate of so-called cost-sharing reduction payments will lead some insurers to abandon selling individual health plans altogether. "The most conservative thing is to leave the market," he said. The second most conservative thing, he added, is to price premiums as if the subsidies won't be paid.
Insurers in a handful of states — Maryland,
Dave Dillon, a fellow of the Society of Actuaries, a group of experts that help set premium rates, said "gross premiums could increase significantly — in the 20-25 percent range" if insurers price in the potential loss of the subsidies for affected plans next year.
America's Health Insurance Plans, a leading industry lobbying group, expressed dismay over the latest delay, and the lack of a guarantee that the subsidies will continue.
"AHIP's position and unwavering focus on cost-sharing subsidies
"It is the single most destabilizing factor in the individual market, and millions of Americans could soon feel the impact of fewer choices, higher costs and reduced access to care."
The warnings Monday came in response to the Department of Justice and House Republicans asking the federal Court of Appeals for the District of Columbia for another 90-day extension on the question of how to proceed with the Trump administration's appeal regarding the subsidies, known as CSRs.
"The parties continue to discuss measures that would obviate the need for judicial determination of this appeal, including potential legislative action," said lawyers for the Justice Department and the House in their joint filing.
The subsidies reimburse insurers for offering lower-income Obamacare customers discounts on out-of-pocket health expense charges in their plans, including copayments,
However, House Republicans last year successfully challenged the legality of CSR reimbursements to insurers after a federal district court judge ruled that the Obama administration had been paying insurers without Congress appropriating the funds.
The Obama administration appealed that decision — and kept the reimbursements flowing to insurers — and the appeal is now being handled by the Trump administration, which has also maintained the payments up to now.
On Monday, a Trump administration senior official told CNBC the government would continue paying insurers the reimbursements for the next three months as officials decide whether to continue fighting the House's case or not.
The administration has the option of ending the payments even as the appeals case remains pending.
Slavitt said the continuation of the
Because insurers have to finalize their premium requests within the 90-day window of the appeals case, they will not know for sure the fate of the subsidies.
"There's no question that based on 100 percent of the people I've talked to ... those [insurers] that will remain in the market will assume the CSRs will not get paid in their pricing assumptions," Slavitt said.
Trump and Republicans are likely to suffer political fallout from higher Obamacare rates next year, Slavitt said.
"I think there will be a pretty harsh judgment based on the polls that I've seen," he said.
Slavitt was echoed Monday by Leslie Dach, another Obama administration veteran who heads the Protect Our Care Campaign, an Obamacare advocacy group.
"Make no mistake, President Trump and Republicans own every premium increase that they have caused through their action and inactions to undermine the health insurance markets," said Dach. "People across the country will hold the president and his allies in Congress accountable for raising premiums for millions of people."
"Today's delay in committing to cost-sharing payments will force millions of people across the country to pay 20 percent more for their coverage — a Trump tax — solely because of the deliberate uncertainty created by the president and his allies. Instead of undermining our health-care system, three-quarters of Americans want the president to make the Affordable Care Act work."
The attorneys general of New York and California, who were part of a group of Democratic state AGs that last week launched a bid to intervene in the court case, said the delay is "already harming those who need health care."
"It's clear that the Trump Administration continues to undermine our health care system – using the New Yorkers and Americans who rely on affordable coverage in a cynical political game," said NY Attorney General Eric Scheiderman "By making the cost-sharing reduction subsidies a political negotiating tool, President Trump and House Republicans aren't just playing a cruel game with the lives of millions; they're destabilizing the health care market and increasing premiums right now, part of an ongoing effort to sabotage the Affordable Care Act."
California AG Xavier Becerra said, "The Trump Administration is playing political football with millions of Americans' health care."
"Using very callous tactics, Donald Trump is making it clear that he will not defend the critical subsidies that make health care accessible for millions of American families," Becerra said.
Alleigh Marre, a spokeswoman for Trump's secretary of Health and Human Services, Dr. Tom Price, on
"It requires impressive mental gymnastics to make the case that Obamacare is working while Americans living in one-third of our nation's counties have only one option for health-care coverage and premiums and deductibles continue to rise," Marre said.
"Obamacare has failed. For this reason, Republicans are reforming health care so it delivers access to quality, affordable coverage to the American people."
Most people who buy Obamacare plans from government-run health insurance exchanges are insulated to a large degree from price hikes because they are eligible for federal subsidies that lower their monthly premiums. The premium subsidies — which are different than cost-sharing subsidies — are currently closely linked to the price of coverage.
The value of those subsidies rises as the premiums
Lower-income Obamacare customers who buy a popular tier of plans known as "silver plans" — which cover about 70 percent of health costs — also qualify for the cost-sharing reduction subsidies. Those CSRs can significantly reduce how much those customers pay out of pocket for visits to a doctor, surgery or prescription medication.