President Trump’s decision stop the funding that keeps your out of pocket costs low will force premiums to skyrocket… an increase of 20% by next year, 25% by 2020, and at a cost of nearly $200 billion over ten years.
The Trump Administration's Health Care Sabotage
Loss of Coverage
Republican “repeal and replace” plans will ensure that tens of millions of Americans are left without health care.
Patient groups across the country warn that President Trump’s Executive Order on health care could “price millions of people with pre-existing conditions and serious illnesses out of the individual insurance market.”
Trump’s Department of Health and Human Services has already announced website downtime during open enrollment and budget cuts to navigators (40%) and outreach (90%).
Republicans are Taking Deliberate Actions to Sabotage Our Health Care
The most used Republican talking point is that Obamacare is “failing,” “imploding,” or “exploding.” President Trump said earlier this year, “the best thing we can do…is let Obamacare explode” and “let it be a disaster because we can blame that on the Democrats.”
These statements are false for two reasons. First, independent analyses show that the Affordable Care Act is working. Standard’s & Poor said it expected insurers’ performance in the marketplaces to be better in 2016 than in 2015, and 2017 would be better than 2016. The Kaiser Family Foundation analysed insurer financial results for the first half of 2017 and found “no sign of a market collapse.” The nonpartisan Congressional Budget Office said it anticipated “the market to be stable” under the ACA. The average premium after tax credits increased by $1 dollar, from $100 in 2016 to $101 in 2017. Currently, 10.2 million people are signed up for coverage in the marketplaces.
Second, the President’s statements do not accurately reflect reality. Republicans are not “letting” the ACA fail, as though they were just mere onlookers watching it happen. No. They are taking deliberate actions to sabotage the health care system. For example, on day one, the Trump Administration issued an executive order demanding federal agencies begin dismantling the Affordable Care Act without protecting parts that are working and without regard to the damage it would cause. In October, President Trump signed an executive order that independent experts agree will sabotage the country’s health care, raise health care premiums and deny access to affordable coverage for people with pre-existing conditions. Whatever President Trump’s motivation – personal hostility toward President Obama or simply spitefulness – the result is clear: his administration is making it harder for people to sign up for coverage and taking steps that are raising people’s premiums and destabilizing the marketplace.
Vast Majority of States Attribute Health Insurance Rate Increases to Trump Sabotage
The deadline for states to finalize premium rates for the individual and small group market and submit them to the federal government for approval passed on September 27, and many states have publicly announced double-digit increases.
A comprehensive review of all the 28 states whose final state-approved rates that have been made public shows that the vast majority — 20 states — attribute their rate increases in part to the Trump administration’s sabotage of our health care. Blame for the increase was squarely placed on the Trump administration and Republicans in Congress injecting uncertainty into the marketplace by threatening to default on cost-sharing reduction (CSR) payments that help lower out-of-pocket costs in some way, shape or form.
- 20 states attribute rate increases to uncertainty over whether the Trump administration will make CSR payments: Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Louisiana, Maine, Michigan, Mississippi, New Mexico, New York, Ohio, Oregon, South Carolina, South Dakota, Tennessee, Utah, Virginia and Washington. (Oregon cited weakening enforcement of the individual mandate for some of its rate increase.)
- Five states indicated their state increases would be even higher if they assumed the Trump administration would not be making the CSR payments: Arizona, Arkansas, Colorado, Maryland and Vermont.
- Two states – Alaska and Minnesota – have mostly cut their insurance rates next year after the federal government allowed them to start a new reinsurance program.
- One state, Nevada, did not release any reason for their 2018 rates.
While they’re not included in this analysis of rates, the sabotage has had other consequences including insurers that decided not to participate in the marketplace next year, citing the uncertainty the Trump administration had created. Anthem in Maine announced it was exiting the marketplace at the last minute, as well as Medica in North Dakota, to name a couple of examples.
Experts warned failure to make these payments would raise premiums by 20% or more and add nearly $200 billion to the national debt. Even Sen. Lamar Alexander (R-TN) warned, “Without payment of these cost-sharing reductions, Americans will be hurt.”
President Trump has been cheerleading his sabotage for months saying earlier this year, “the best thing we can do… is let Obamacare explode” and “let it be a disaster because we can blame that on the Democrats.”
We now have the clearest evidence yet that the Trump administration’s sabotage of our health care system is leading to the higher insurance rates we are seeing for 2018.
Prior to the Trump administration, independent analyses show that the Affordable Care Act was working. Standard’s & Poor said it expected insurers’ performance in the marketplaces to be better in 2016 than in 2015, and 2017 would be better than 2016. The nonpartisan Congressional Budget Office said it anticipated “the market to be stable” under the ACA.
President Trump’s dangerous Executive Order on health care
President Trump and his administration have taken deliberate actions to sabotage our health care. On October 12, President Trump signed an Executive Order that would roll back key protections and result in garbage insurance, raise premiums, reduce coverage and expose millions of Americans again to discrimination based on pre-existing conditions.
Then later that night, his administration announced it would default on payments that help lower people’s out-of-pocket costs known as cost-sharing reductions, or CSRs. The nonpartisan Congressional Budget Office said failure to make these payments would result in higher premiums of 20 to 25 percent, make insurers leave the marketplace, and add nearly $200 billion to the national debt.
Why is he doing this? The answer is clear: out of spite and political games. He failed repeatedly to pass a so-called “repeal and replace” bill through Congress, so now he is purposely sabotaging the markets. This is repeal by another means, pure and simple. As he recently stated at the Values Voters Summit, “It’s step by step by step… And one by one, it’s going to come down.”
President Trump famously said “the best thing we can do…is let Obamacare explode” and “let it be a disaster because we can blame that on the Democrats.” But as his actions this week lay bare, he is not letting Obamacare fail, he is making Obamacare fail, and more people are realizing he now owns the mess he created.
Making it Harder for People to Enroll – Meaning Fewer Will Sign Up
The Trump administration is making it much harder for people to enroll in the marketplaces. For the final days of open enrollment in January 2017, the Trump Administration cut 75% of television advertising and all digital advertising that helped people find out about their health care options- resulting in an estimated 500,000 fewer people getting coverage.
Then, the Trump administration announced it was cutting the number of days people could sign up for coverage in half for future enrollment periods, from 90 days to 45 days.
For the open enrollment period that begins on November 1, 2017, the Trump administration already said it was cutting the outreach ad budget by 90 percent, from $100 million to just $10 million. The administration will be shutting Healthcare.gov down for part of the day on most Sundays. Sens. Brian Schatz (D-HI), Elizabeth Warren (D-MA), Cory Booker (D-NJ) and Chris Murphy (D-CT) wrote to the Department of Health and Human Services demanding answers about why this is going to happen.
BuzzFeed News reported that the Trump administration ordered the Department of Health and Human Services’ regional directors to stop participating in open enrollment events. Mississippi Health Advocacy Program Executive Director Roy Mitchell said, “I didn’t call it sabotage…But that’s what it is.”
Add to that cuts to in person assistance, call centers being closed and a new final deadline to sign up.
All of these actions will result in reducing the number of people who sign up in the marketplaces. What this will mean is that those people who do sign up are more likely to be sicker and older, since they have a higher incentive to sign up than younger, healthier people. That in turn will cause premiums to spike. In other words, the Trump administration’s direct actions will be responsible for fewer people signing up for health care and raising premiums for those who do – a clear case of sabotage if there ever was one.
CSRs: Raising Rates and Destabilizing the Marketplace
Another big part of Trump’s sabotage campaign is his decision to stop funding the cost sharing reductions (CSRs), which lower people’s out of pocket costs. The result: an increase in deductibles and out-of-pocket costs for the majority of those covered through the ACA marketplaces. As Sen. Lamar Alexander (R-TN) said, “Without payment of these cost-sharing reductions, Americans will be hurt.”
The proof is in the pudding. States that have finalized their rates for 2018 say they raised them even more because of the uncertainty over whether the Trump administration will pay these cost-sharing reductions. Experts agree, failing to make these payments will mean higher premiums and will explode the national debt.
Congressional Budget Office: Congressional Budget Office says that failure to make these payments would mean people’s health insurance premiums will go up 20 to 25 percent and add nearly $200 billion to the debt over the next decade.
Center for American Progress: “The Center for American Progress estimates that uncertainty around CSRs and mandate enforcement will raise 2018 premiums for benchmark coverage an extra $1,061 annually for a 40-year-old and $2,491 annually for a 64-year-old.”
Kaiser Family Foundation: “Benchmark premiums would increase by 19 percent on average if cost-sharing subsidies were unpaid.”
Urban Institute: “We find that premiums for silver marketplace plans would increase $1,040 per person on average.”
Urban Institute: “A precipitous drop in insurer participation is even more likely if the cost-sharing assistance is discontinued.”
Commonwealth Fund: “Eliminating cost-sharing reductions could destabilize insurance markets.”
Kurt Giesa, Practice Leader, Oliver Wyman Actuarial Consulting: “Our modeling shows that this uncertainty, if it remains, could lead payers to submit rate increases between 28 and 40 percent, and more than two-thirds of those increases will be related to the uncertainty around CSR payments and individual mandate.”
State Insurance Commissioners and Agencies
Julie Mix McPeak, President-Elect, National Association of Insurance Commissioners and Tennessee State Insurance Commissioner: “I am very fearful that we’ll have insurers make a decision to leave markets as a result of the uncertainty.”
Teresa Miller, Pennsylvania Insurance Commissioner: “Failing to make payments to insurers for cost-sharing reductions would force insurers to request a statewide average 20.3 percent increase rather than 8.8 percent statewide average that was filed with the department in may.”
Mike Kreidler, Washington State Insurance Commissioner: “The current federal administration’s actions – such as not committing to reimburse insurers for cost-sharing subsidies and not enforcing the individual mandate – appear focused only on destabilizing the insurance market.”
Lori Wing-Heier, Director, Alaska Division Of Insurance: “It is expected that health care premiums would jump as high as 20 percent if trump follows through with his threat to cut subsidies.”
Dave Jones, California State Insurance Commissioner: “President Trump appears on a mission to destroy health-insurance markets by creating instability through his own actions and thereby depriving millions of Americans of health-care coverage.”
Marguerite Salazar, Colorado’s State Insurance Commissioner: “Commissioner Marguerite Salazar said the Trump Administration threatens the whole market. ‘My fear is it may collapse.’”
Determination by the Florida Office of Insurance Regulation: “Florida regulators said most of the average rate hike — 31 percentage points [of the 44.7 percent total]— came from standard plans sold on the ACA exchange at Healthcare.gov. Insurers raised rates for those plans due to the political uncertainty that has plagued the healthcare debate, specifically whether the Trump administration will stop paying subsidies that lower out-of-pocket costs for low-income Americans.”
Eric A. Cioppa, Superintendent, Maine Bureau Of Insurance: “If they don’t get a subsidy, i fully expect double-digit increases for three carriers on the exchanges here.”
Health Care Industry
U.S. Chamber of Commerce, American Benefits Council, American Hospital Association, Federation of American Hospitals, American Medical Association, American Academy of Family Physicians, BlueCross BlueShield Association, America’s Health Insurance Plans: The most critical action to help stabilize the individual market for 2017 and 2018 is to remove uncertainty about continued funding for cost sharing reductions (CSRs)…If CSRs are not funded, Americans will be dramatically impacted.”
National Academy for State Health Policy: “The Federal Government must commit to funding CSR payments in order to lower rates and stabilize carrier participation.”
Dan Hilferty, President and CEO, Independence Blue Cross: “We firmly believe your coverage will be there for 2018, if the federal government, Congress and president commit to, fund the subsidies during an interim period of time.”
Kelly Paulk, Vice President, Product Strategy and Individual Markets, Blue Cross Blue Shield of Tennessee: “We have to factor in two significant uncertainties…combining those two factors leads to an average 21 percent rate increase.”
Danielle Devine, Michigan Director of Operations, Meridian Health Plan: “The political climate continues to make it difficult to price and the uncertainty over the future of the subsidies creates the largest reason for significant rate increases.”
Rick Notter, Director of Individual Business, Blue Cross Blue Shield of Michigan: “If we don’t have that cost-sharing (subsidy), we have to make up the difference and the only way for us to do that is with a higher rate.”
Dr. Mario Molina, Former CEO, Molina Healthcare: “The Administration and Republicans in Congress want you to believe that insurers raising premiums for their plans or exiting the marketplaces all together are consequences of the design of the Affordable Care Act instead of the direct results of their own actions to sabotage the law. Don’t let them fool you.”
Brad Wilson, CEO, Blue Cross Blue Shield of North Carolina: “The failure of the Administration and the House to bring certainty and clarity by funding CSRs has caused our company to file a 22.9 percent premium increase, rather than one that is materially lower.”