Connecticut will join other states in a lawsuit against the Trump administration after the White House announced its intention to end key payments to insurance companies who sell plans on Affordable Care Act exchanges.
“President Trump’s latest action is incredibly mean-spirited,” state Attorney General George Jepsen said Friday. The lawsuit accuses Trump of violating President Barack Obama’s signature health care law as well as a law that governs the way presidential administrations can establish new regulations.
The more than 40,000 people in Connecticut who qualify for cost-sharing reduction payments will continue to receive them, but the move is anticipated to further destabilize insurance markets with the brunt of any premium increases borne by higher-income Obamacare customers, some of who may choose to stop buying health insurance.
Insurers who sell Affordable Care Act plans — including Anthem and ConnectiCare in Connecticut — faced months of uncertainty over whether or not the Trump administration would continue the cost-sharing reduction payments, which offset the expense to insurers to sell silver-level plans with reduced deductibles and copays to low-income customers.
President Donald Trump for months has decried the billions of dollars in payments, which go to about 6 million Americans, as a “bailout” for the insurance industry. But the nonpartisan Congressional Budget Office warned premiums — and the federal deficit — would increase if the payments were cut off.
Anthem and ConnectiCare receive about $50 million in cost-sharing reduction payments for Connecticut customers. An Anthem spokeswoman referred to a joint statement from America’s Health Insurance Plans and Blue Cross Blue Shield Association.
“These benefits help real people every day, and if they are ended, there will be real consequences,” the two insurance groups said. “These payments are not a bailout – they are passed from the federal government through health plans to medical providers to help lower costs for patients who see a doctor to treat their cancer or fill a prescription for a life-saving medication.”
“The prices of health care are going to go up, the uninsured rate is going to go up,” Lt. Gov. Nancy Wyman, chairman of the board that oversees Access Health CT, the state’s health insurance exchange, said Friday. “This is a terrible move by the president.”
But Wyman noted that the state Insurance Department had anticipated the payments coming to an end when it approved average rate increases next year of 31.7 percent for Anthem customers and 27.7 percent for ConnectiCare customers.
“Connecticut was proactive in anticipating this possible change,” said Access Health CT CEO Jim Wadleigh. He noted that 2018 plans and rates would not be affected by the payments coming to an end.
Members of Connecticut’s congressional delegation said Congress should move quickly to pass legislation to continue the payments.
“This shouldn’t be a surprise to anyone in Congress, and it’s why many of us have been racing to come up with a bipartisan health care bill to prevent this exact sort of blatant sabotage,” said Sen. Chris Murphy, who serves on the Senate’s health committee.
Customers who qualify for tax credits to help pay their premiums will see those subsidies increase as rates rise. But the 25 percent of Access Health CT enrollees who receive no federal assistance will be on the hook for higher premiums as a result of the cost-sharing payments coming to an end.
“The ultimate solution is to bring down the cost of health care,” Blumenthal said. “As long as those costs are as high as they are now, the insurance market will depend on some kind of support or subsidies for people who need and deserve health care insurance.”
Rep. Rosa DeLauro said Trump was “dead wrong” to refer to the cost-sharing reduction payments as a bailout.
“The truth is that they help people with modest means reduce their out-of-pocket healthcare costs,” she said. “This action hurts the working and middle class Americans that President Trump promised to advocate for.”
Supporters of the Affordable Care Act worry that Trump’s action will create more uncertainty in the marketplace and cause young, healthy consumers to turn away from Obamacare exchanges, believing they will be financially out of reach. Gov. Dannel P. Malloy said Trump has created “great confusion” about the individual insurance market heading into enrollment season for 2018.
“This latest move to cut off cost-reduction subsidy payments is vindictive and deliberately designed to sabotage healthcare insurance markets throughout the nation,” Malloy said.
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