OPINION: Health Care Chaos Can Be Deadly
By Bethany Pray
Chaos causes sleepless nights, panic and financial ruin, and sometimes – when the issue involves international relations or health care – chaos kills.
The decision announced yesterday by President Trump to end funding for cost-sharing reductions will engender chaos, with disastrous outcomes on a personal and market level unless Congress acts quickly. With the decision to expand association health plans, this is the second impulsive and harmful act in as many days.
Premium tax credits (PTC) help lower premium costs for the majority of customers who purchase coverage through a federal or state exchange, but cost-sharing reductions (CSR) help a slightly smaller group get more use of their benefits, by lowering deductibles and co-pays or coinsurance. For those at the lower end of the income scale, a Commonwealth study shows that a silver plan deductible of over $6,000 can dip to as low as $1,100, and co-payments for drugs may be halved. Cost-sharing reductions (CSR) will remain available to people who make too much to qualify for Medicaid but not more than 250 percent of the federal poverty level (FPL), i.e. less than $61,500 for a family of three, or $30,150 for an individual.
While insurance companies will still be required to offer CSR to these customers, the White House action eliminates the funding that insurance carriers get to cover those costs. Without that funding, carriers will need to increase premium prices by up to 15 percent for all customers in order for plans to remain solvent. That increase would be in addition to already major hikes planned for premium prices in 2018, because Colorado insurers were instructed to offer rates that assumed that the federal government would continue to support the CSR program. In total, we estimate premiums could increase by an average of 40 percent if Trump’s action stands for customers who don’t qualify for assistance. Those who do qualify will see minimal or no change to their monthly payments.
So, who loses?
First, this throws a massive wrench into preparations for open enrollment, slated to begin November 1. Though our state exchange, Connect for Health Colorado, has done extensive contingency planning, the de-funding will affect everyone’s ability to access coverage. The situation could be far worse on the federal exchanges.
Second, the roughly 75,000 Coloradans who in 2017 purchased their coverage and were not qualified for assistance (or failed to seek assistance) will see unaffordable premium increases in 2018. Individuals who simply can’t pay will lose access to necessary care: blood pressure medication, insulin, drug treatment, and other life-sustaining services that can’t be accessed through emergency medicine. Those most likely to find care unaffordable will be older Coloradans and Coloradans who live in high-premium areas in the Eastern Plains and the Western Slope and mountain corridor.
But in the end, everyone loses. Premiums will be expected to rise even more steeply in coming years to adjust for the fact that healthy people will drop out of the market and only the sick, with higher costs on average, will remain in the market. Carriers are expected to promptly exit the market – though their ability to do so for 2018 could be limited – and it’s anticipated that large swathes of Colorado will have no access at all to individual coverage with credit assistance.
When tens of thousands of Coloradans lose coverage, all Coloradans suffer. When a million Americans lose coverage, as the Congressional Budget Office projected in August, public health crises have room to roam, and more uncompensated care means higher prices for everyone, even if your employer offers coverage. But on a more personal level, we want to live well and work well. We want our neighborhoods, our schools, and our businesses, to thrive. Getting access to health coverage and health care is key to making that happen.
We condemn this mean-spirited and destructive action that would throw the health insurance market, and millions of Americans, into chaos.
Senators Alexander and Murray continue to develop a plan that could reverse this destructive White House move. We ask that our Colorado delegation recognize that this health care chaos will lead to disaster and vote accordingly to stabilize markets, without compromising in ways that undermine the ACA’s consumer protections.
Please contact your U.S. senators and representatives and make your concerns about this decision known.
Bethany Pray is a Health Care Attorney for Colorado Center on Law and Policy.