However, Blue Cross said its rate hike proposal would be 8.8 percent if the company had assurance from Congress that the Affordable Care Act will continue reimbursing insurers for hefty ACA discounts available to low-income customers. […]Long story short: the Republican plan calls for the elimination of CSR subsidies, which help poor people afford deductibles and other health care costs. The problem, as Tajlili explained to ABC11, is that the law would still require BCBS to offer CSR benefits.
Blue Cross cited several reasons for requesting an average rate increase of 22.9 percent. One is an increase in medical costs, including doctors, hospitals and and medicines, which the insurer cites every year it seeks rate increases.
Another is the looming elimination of “cost sharing reductions” in the Republican [Obamacare replacement] plan. These reductions offer extra subsidies on deductibles and other out-of-pocket costs to lower-income people whose household incomes are between 100 percent and 250 percent of the federal poverty level.
The reductions are available for a single customer with a household income ranging from $12,000 to $25,000, and for a family of four with a household income ranging from $25,000 to $62,000, said Brian Tajlili, the company’s director of actuarial and pricing services.
Tajliji noted that about 67 percent of the people Blue Cross insures under the ACA in North Carolina qualify for the cost sharing reductions.
"We're seeing the market begin to stabilize after three years of coverage. Unfortunately, the lack of CSR funding significantly increases the rates for all ACA customers. We are still required to offer the additional CSR benefits to participate in the Exchange, so covering these costs without CSR funding will drive up our average rate for next year."Indeed, President Trump has repeatedly threatened to cut off CSR payments, which amount to about $7 billion a year, as part of an effort to force Democrats to support the Republicans’ American Health Care Act, which would send the Obamacare markets into a tailspin.
In an interview with The Economist, Trump said he would cut off the cost-sharing reductions (CSRs) — payments that reimburse insurers for providing discounted out-of-pocket costs to help those with low incomes afford insurance.If there’s one thing insurance markets hate, it’s uncertainty. And this is uncertainty—and it’s destabilizing the exchanges. Then again, perhaps that’s a feature, not a bug.
"[T]here is no Obamacare, it’s dead. Plus we’re subsidizing it and we don’t have to subsidize it. You know if I ever stop wanting to pay the subsidies, which I will," Trump said. "Anytime I want."