Tens of thousands of Washington residents buying health insurance through the Affordable Care Act will pay higher rates unless Congress acts, the state insurance commissioner says.
Commissioner Mike Kreidler said people buying a silver plan from the Washington Health Benefit Exchange will see rates rise 9 to 27 percent, depending on the insurer, after President Donald Trump’s decision last week to end federal subsidy payments, which are called cost-share reductions, or CSRs.
“President Trump’s devastating refusal to pay federal funding that helps people afford health insurance leaves me no choice but to reluctantly allow health insurers to charge higher premiums for 2018,” Kreidler said in a statement Tuesday.“Not allowing the higher rates would cause further instability in our market.”
Congress still can fund the subsidies. If that happens, the originally approved lower rates will be applied.
U.S. Sens. Patty Murray, D-Wash., and Lamar Alexander, R-Tenn., said Tuesday they have the “basic outlines” of a bipartisan agreement to resume federal payments.
A Democratic aide said the deal would ensure that cost-sharing payments that reduce consumers’ out-of-pocket costs would continue through 2019 and provide outreach money for the 2018 and 2019 enrollment periods.
The Trump administration has drastically reduced the advertising budget for the ACA by 90 percent.
Insurance companies and the state Office of the Insurance Commissioner had built in a provision to trigger higher rates in the Washington state exchange if the subsidies were to end.
The rates were approved last month with an average increase of 24 percent for all plans with the subsidies intact — the largest hike since the ACA, also known as Obamacare, came online in 2013.
Kreidler and health-care experts blamed the dramatic increase on the uncertainty surrounding the ACA. For months, Trump has threatened to end the cost-sharing payments and said he wants to scrap the mandate requiring people to be insured.
Under the ACA, insurance companies must provide the subsides to consumers regardless of whether Congress funds the cost-sharing reimbursements. So they are raising premiums to cover the costs.
The exchange offers several of what are called metal plans. The silver plan, where tax credits and the cost-sharing payments are applied, has been bought by 110,000 in Washington.
People who make between 138 percent and 250 percent of the federal poverty level receive tax credits to reduce their monthly premiums and subsidies that go toward reducing deductibles and co-payments.
About 70,000 people in the silver plan receive these subsides. Customers buying into the plan who fall between 250 percent and 400 percent of the federal poverty level receive only the tax credits to reduce their monthly premiums.
The latest health care development comes before open enrollment for the ACA begins Nov. 1.