Jakob Rodgers, The Gazette
Health insurance rates next year will rise even higher than expected after President Donald Trump’s decision to stop paying insurers for certain subsidies, the Colorado Division of Insurance announced Friday.
Insurance rates across the state will rise an average of 33 percent next year, 6 percent higher than originally planned, said Colorado Division of Insurance Commissioner Marguerite Salazar.
The additional price hike raised fresh concerns about the health and future of Colorado’s insurance markets, as well as whether insurers will stay on the exchange in 2019.
Salazar called Trump’s latest decision, which ends cost-sharing reduction payments to insurers, “cruel and irresponsible.”
“It doesn’t help people and will actually hurt consumers,” Salazar said in a statement.
The subsidies help limit co-payments and deductibles for 45,000 Coloradans earning up to 2½ times the federal poverty level.
They will continue flowing despite Trump’s order, because insurers are still obligated by law to provide them.
But carriers plan to increase rates to make up the difference in lost federal payments.
Trump has derided the payments as a bailout for insurers, and he cited a federal court ruling that Congress never properly approved the payments.
Some Colorado health care policy experts blasted Trump’s latest move, which came days after a separate order affecting the use of association health plans.
Together, they said, Trump’s actions could destabilize the state’s individual insurance market.
“None of those actions are going to improve the market – they’ll do just the opposite,” said Joe Hanel, a spokesman for the Colorado Health Institute. “They’re going to cause higher prices, probably fewer people to be insured and just in general, discourage insurance companies from participating in this market.”
Benjamin Miller, director of the Eugene S. Farley Jr. Health Policy Center in Aurora, questioned the reasoning behind both of Trump’s actions. In one week, he said, Trump delivered a double-whammy against the state’s insurance markets.
“Political ideology is taking precedent over people,” Miller said. “And there’s no two ways about this. As a guy who lives and breathes evidence, it’s hard to see how there’s an evidence base supporting this.”
Their concern was not universal.
While a blow to the state’s insurance exchange, Trump’s moves don’t spell serious trouble for the Affordable Care Act as a whole, said Adam Atherly, professor of health care policy at the University of Colorado’s School of Public Health. For example, only 8 percent of Coloradans shop on the affected market.
“Again, I also think this is kind of overblown,” Atherly said.
Prior to Trump’s announcement, insurance rates for people buying their own insurance were already slated to rise 27 percent in 2018.
It marked the second-straight year of rate increases above 20 percent. And it came despite signs earlier this year of a stabilizing marketplace.
Some insurers turned a profit during the first quarter of 2017, and enrollment continued to rise on the state’s exchange, Connect for Health Colorado.
But that stability proved fleeting. Insurers cited the turmoil over congressional Republicans’ plan to scrap Obamacare as a reason for raising rates, along with rising medical and prescription drug costs.
Trump’s latest move only compounds those problems, said Vincent Plymell, a Colorado Division of Insurance spokesman.
A concern is insurers pulling out of Colorado’s exchange in 2019. Doing so would insulate them from those lost federal payments.
The deadline for leaving the exchange ahead of the 2018 enrollment period passed Oct. 1, leaving insurers no choice but to stay for at least a year.
“We expect them to honor that commitment,” Plymell said.
The hardest hit may be people who earn just more than four times the federal poverty level, said Adam Fox of the Colorado Consumer Health Initiative. That’s because they can’t access federal tax credits that shave their monthly premiums.
Those tax credits rise and fall with the cost insurers’ premiums, insulating shoppers from dramatic rate increases.
He accused Trump of incrementally dismantling his predecessor’s health law.
“At this point, we’re looking at sabotage, upon sabotage, upon uncertainty, upon more sabotage,” Fox said. “It’s sort of a question about how much can the individual market really endure.”
Gov. John Hickenlooper swiftly condemned the move as “cruelty without benefit.”
Funding for the subsidy payments was a central pillar of a plan to stabilize the insurance markets that Hickenlooper, a Democrat, created with several other governors, including Ohio’s Republican Gov. John Kasich.
On Friday, Hickenlooper reiterated calls to fund the subsidies through at least 2019 while creating a bipartisan solution to stabilize insurance markets.
Open enrollment – the annual period when people on Colorado’s individual market can purchase coverage for the upcoming year – is slated to begin Nov. 1.
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