Executive order could mean bigger rate increase in Pennsylvania
HARRISBURG — Democratic Gov. Tom Wolf, Pennsylvania’s leading hospital association and advocates for the poor all reacted strongly Friday to a move by the Trump administration to stop paying subsidies that have helped lower the price of health insurance policies sold through the Healthcare.gov marketplace.
In addition, Pennsylvania’s attorney general, Democrat Josh Shapiro, joined with 18 other states in suing the Trump administration to prevent it from stopping the payments.
Wolf and Antoinette Kraus, executive director of the nonprofit Pennsylvania Healthcare Access Network, also accused President Donald Trump of working to destabilize health insurance markets.
“If the President’s attempt to destabilize the health care market succeeds, it will have a devastating impact on Pennsylvania families, our economy and the health care market in our Commonwealth,” Shapiro said in a statement.
Citing estimates by congressional analysts, Andy Carter, president and CEO of the Hospital and Healthsystem Association of Pennsylvania, said that more than 500,000 Pennsylvanians who buy insurance in the individual market could see premiums spike by more than 20 percent in 2018.
That, he said, could price many people out of the market for insurance.
“We implore Congress to take swift, bipartisan action to protect consumers from these steep premium increases and help support a robust and competitive insurance market,” Carter said.
Pennsylvanians received $214 million in federal subsidies last year, with 234,000 enrollees — or more than more than half of the people covered by insurance through Healthcare.gov — benefiting from them, according to federal data. That’s about $915 per enrollee for the year.
In announcing the decision late Thursday night, the Trump administration said the government cannot legally continue to make the payments.
The subsidies lower the cost of deductibles and copayments for policyholders with income low enough to qualify, up to 250 percent of the federal poverty level. Even without the federal reimbursement, insurers are required to offer the lower deductibles and copayments. But insurers have said they must raise premiums to account for the loss of the federal reimbursement.
Earlier this year, insurers asked Pennsylvania state regulators to approve an average 9 percent premium increase for 2018, a rate that assumed the federal government would continue paying the subsidies. Insurers proposed average rate increases of more than 20 percent without the subsidies.
The Insurance Department has not yet published final rates for 2018. Kraus said higher tax credits would make up for part of the cost of higher premiums, but policyholders would still end up paying more.