Trump ends CSR subsidies

[Ann H]

The Trump administration will immediately stop making critically important payments to insurers who sell Obamacare health plans, a bombshell move that is expected to spike premium prices and potentially lead many insurers to exit the marketplace.

The decision to end the billions of dollars worth of so-called cost-sharing reduction (CSR) payments came after months of threats by President Donald Trump to do just that. The news came only hours after Trump signed an executive order that Obamacare advocates said could badly harm the individual insurance marketplaces.

Obamacare bombshell: Trump kills key payments to health insurers

 

[BADTROUT]

Living in an area where there is only ONE reluctant carrier offering ACA compliant health coverage already over many nearby counties, literally ANY change is welcome. Easing the borders, allowing association plans, initially will scare more carriers, but with added ability to actuate coming, they can price more for the risk of the healthy. Making things FAR more attainable for the VAST majority. I know we all have stories of the person or two that had no hope of coverage before Obamacare started, but thats far outweighed by the families I talk to daily that dint qualify for enough subsidies to afford anything... and the families with the big house and all the toys one could want getting nearly fully subsidized. Healthcare should not be dependent on wealth OR poverty because I have had employees refuse raises because it would jeopardize their free (so they think) healthcare. This isnt a right or left thing, This is the complete and utter failure of Obamacare. Lets hope this helps... even just a little.

 

[Yagents]

Not paying the CSR's eliminates the games being played by some people.
We all know APTC can be clawed back entirely at tax time......right?
Now, unlike before, the entire CSR portion can be clawed back at tax time.
The full price of silver going up, causes higher APTC , and larger clawback.

And the press is having a field day on the so called sabotage. If they only knew the insurance companies and the consumers still get the same tax dollars, just from a different taxpayer slush fund. If they only knew making the payments is actually illegal. If they only communicated that 99% of people won't feel the impact.

 

[Ann H]

Not paying the CSR's eliminates the games being played by some people.
We all know APTC can be clawed back entirely at tax time......right?
Now, unlike before, the entire CSR portion can be clawed back at tax time.
The full price of silver going up, causes higher APTC , and larger clawback.

And the press is having a field day on the so called sabotage. If they only knew the insurance companies and the consumers still get the same tax dollars, just from a different taxpayer slush fund. If they only knew making the payments is actually illegal. If they only communicated that 99% of people won't feel the impact.

Agreed. You understand this, Yagents, but it's likely that many readers don't. The insurance companies must still give cost sharing reductions, they just no longer get a direct reimbursement from the government to pay for it. However, they will still get an indirect reimbursement. So, when a very low-income person applies for a Silver plan, they have reduced "cost-sharing" (i.e. deductibles, copays, etc.). They are also heavily subsidized for the premium. Now that the government is not paying for the cost-sharing reductions directly, the insurance companies will spike the premium of the Silver plans, which are the only plans eligible for cost-sharing reductions. The premium for Silver plans will be higher than Gold plans. Nobody will buy silver plans except people who are eligible for cost-sharing reductions. Those folks also get a big premium subsidy. The government must pay all of the premium, with the exception of a small amount that is based on a percentage of that person's household income. The percentage of income that the low-income person pays for his premium will not go up, so the government has to pay the rest of the premium for that now-expensive silver CSR plan. So, in a round-about way, the government is still paying for the cost of providing plans with cost-sharing reductions. If carriers understand this and are able to convince their DOIs to let them raise the rates for CSR-eligible Silver plans, then we've come full circle. If not, then carriers will exit the market.

 

[taterpeeler]

The brunt of this will be felt by those of you with large non subsidy business. I expect, just like i predicted many moons ago, there will be NO off exchange unsubsidized market. They will either purchase short term (if allowed for 12 months) or Jesus plans or crappy fixed indemnity.

The funny thing is Trumps maneuver hurts the traditional GOP voter more that the democrat voter.

 

[AllenChicago]

Some companies factored in the potential loss of CSR payments to the 2018 premium. Some companies did not. Can the companies who did not factor in the CSR cuts, now go back and request an additional 30% increase or whatever?

 

[Ann H]

Some companies factored in the potential loss of CSR payments to the 2018 premium. Some companies did not. Can the companies who did not factor in the CSR cuts, now go back and request an additional 30% increase or whatever?

Many state DOIs have allowed carriers to file 2 sets of rates - with CSR subsidies and without.

 

[traceyemoon]

Interesting article from IA&B:

Trump's new Obamacare moves could cost Uncle Sam nearly $200 billion

Trump's new Obamacare moves could cost Uncle Sam nearly $200 billion

 

[Yagents]

Trump cutting off subsidy payments poses tough decisions for insurers

But there are concerns about insurers in at least 10 states, including Alaska, Arkansas, Maryland, Oregon, and Washington, where carriers were told to set rates assuming they would receive the CSR payments, according to the National Association of Insurance Commissioners. In those states, there will be a scramble to redo the rates.

 

[Yagents]

Stop the madness and misinformation:

Tenet, Community Health Systems, Anthem share prices fall following word that subsidies are ending

The termination of the subsidies will likely result in a rise in bad debt at hospitals as more patient co-pays and deductibles go unpaid, said Mizuho Securities healthcare analyst Sheryl Skolnick, in a note to investors Friday. "This is assuming that exchange members can even buy an exchange plan in their areas," Skolnick said.