Donald Trump’s decision to halt cost-sharing reduction payments to insurers providing coverage on the Affordable Care Act exchanges was one of the key factors sparking insurers' decision to boost rates, which have risen anywhere fom 7 to 38 percent, according to an analysis by the Kaiser Family Foundation.
Repeated threats by Trump since his inauguration to end the controversial CSRs, say the analysis, made insurers wary that he might actually do so. In addition, his refusal to see that the individual mandate was enforced made them even more nervous—so they planned rate hikes for 2018 to compensate. Without the CSRs or mandate enforcement, they stood to lose some serious money on policies covering the poorest and sickest of customers.
Since insurers are obligated to offer reduced cost sharing via silver-level plans to low-income consumers with incomes up to 250 percent of the poverty level regardless of whether CSRs are paid, they had to make their decisions, finalize premiums and sign contracts before the September 27th deadline if they still wanted to offer coverage on the ACA’s federal marketplace.
Naturally, the announcement of the termination of the CSRs came on October 12—but many insurers had already built a premium increase into the rates they provided to regulators. In fact, insurers had taken four basic approaches to rate setting for 2018, some with input from state regulators and some without.
Some companies did not adjust their rates at all, while others increased premiums for all ACA-compliant individual market policies across the board, both inside and outside the marketplace.
Or they “increase[d] premiums for silver-level plans inside and outside the marketplace,” the report says, adding, “Silver plans are relevant because cost-sharing reductions for low-income marketplace enrollees are only available in those plans.” The fourth approach was to increase premiums only for silver-level plans inside the marketplace, since cost-sharing reductions are only available in marketplace silver plans.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
