WYSO

End To Insurance Subsidies Sparks Concern Over Spike In Next Year's Health Care Costs

Oct 16, 2017

Premier Health provider, Miami Valley Hospital
Credit WYSO/Joshua Chenault

Health advocates are warning some Ohioans with private health insurance plans could see their premiums and costs rise next year unless Congress or President Donald Trump steps in to reverse a recent Trump administration order ending so-called cost-sharing payments to insurance companies. 

The reimbursement payments would amount to about $7 billion next year, AP reports.

A coalition of nearly 20 state attorneys general is threatening to sue to protect the subsidies, which help lower copays and deductibles for millions of Americans, mostly people earning less than $29,000 a year with insurance through the individual Affordable Care Act marketplace.

But, an analysis by NPR News finds the subsidy cut would most impact middle class individuals or families that purchase private insurance through exchanges, who could see their 2018 health care expenses go up by an average of 20 percent.

NPR reports that's because when premiums rise, tax credits designed to offset costs for people on the lower end of the economic ladder also go up.

According to the Kaiser Family Foundation, 93,661 marketplace enrollees benefited from cost-sharing reductions in 2017.

Source: Kaiser Family Foundation analysis of data from March 15, 2017 Effectuated Enrollment Snapshot, Centers for Medicaid and Medicare Services (CMS), June 12, 2017.
Credit Kaiser Family Foundation / Kaiser Family Foundation

Another 156,711 received advanced premium tax credits.

Gov. John Kasich is also speaking out against Trump's move to cut the insurance subsidies.

On Sunday NBC's "Meet the Press," Kasich said ending the payments will hurt people who won't be able to afford more expensive health coverage.

He’s urging Congress to work towards a bipartisan solution to improving the Affordable Care Act. Ohio is among the states that expanded Medicaid under the ACA to cover more than 700,000 Ohioans.

The Associated Press reports, "Kasich was noncommittal when asked about running for president in 2020."

Katherine Fallon, a researcher at the nonprofit organization Policy Matters Ohio, says the potential loss of federal funding is fueling more uncertainty in states’ insurance markets.

“We don’t know exactly what is happening, or how these payments will be phased out. We’ve already seen an increase in premiums in Ohio, something like a 30 percent increase for the 2018 year, in part because of the instability.”

Fallon says it's unclear whether Ohio and other states will find ways to make up for the loss of federal reimbursements. 

In an emailed statement Friday, CareSource officials said they had already factored in the potential loss of federal subsidies into next year's premiums. Officials say premiums for the rest of 2017 will not be affected. And they say subsides will continue to be available for marketplace plans for 2017 and 2018. 

The Ohio Department of Insurance predicts the average cost of individual non-employer plans will be 34 percent higher next year.

Open enrollment for private health insurance is set to begin Nov. 1. Click here for information about how to sign up.