The Health Insurance Issue Explained

A sign identifeis the offices of the nonpartisan Congressional Budget Office

Anthem's departure - along with Aetna and UnitedHealthcare - means only one insurer will offer individual plans in more than half of Virginia's counties and independent cities next year, according to Katha Treanor, a spokeswoman for Virginia's Bureau of Insurance. About 7 million consumers receive the benefit. Because of the automatic subsidy alluded to above that would kick in should premiums rise many low-income individuals would receive a different subsidy in lieu of the one that they're now receiving if they're receiving a subsidy from the online exchanges presently.

The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) have estimated the effects of terminating those payments for cost-sharing reductions (CSRs).

The agency expected most states would allow insurers to concentrate premium increases in silver plans, not bronze or gold, so nearly all people who do not qualify for subsidies would avoid silver plans. That is because the CBO predicts that insurers would raise their premiums on silver plans to make up for the loss of the federal payments, which insurers would still need to give to those customers. This, of course, would increase the out-of-pocket costs borne by consumers and potentially send the healthcare exchanges (i.e., the online marketplace) into the death spiral that all of us keep hearing about. "Congress owes struggling Americans who buy their insurance in the individual market a breakthrough in the health care stalemate", Mr. Alexander said. In a memo Friday, the agency said many states are now requiring companies to file their rates for 2018 on the assumption that they won't be reimbursed. Individuals who make between 100 and 250 percent of the federal poverty level - about $12,000 to $30,000 a year - are eligible for these subsidies.

But the administration has continued paying the subsidies month to month as it waited for Congress to overhaul the Affordable Care Act. Trump tweeted out on July 29.

"DFS has carefully examined the rates requested by health insurers to reduce the burden of excessive health insurance premium increases on New Yorkers while maintaining competitive markets in the face of rising national health care and pharmaceutical costs, compounded by ill-conceived Congressional attempts to repeal or replace the Affordable Care Act", Financial Services Superintendent Maria Vullo said.

What, exactly, would happen if the payments were cut off at the end of 2017?

That requirement can save thousands of dollars for families with big medical bills, especially those with low incomes, but it imposes a significant cost on insurance companies.

It also found that premiums would be 25 percent higher by 2020, which would increase the amount of government-provided tax credits to help shield low-income people from premium increases. Silver plans are the third-highest tier behind platinum and gold but ahead of bronze.

The cost-sharing reduction payments to insurers are not guaranteed by the ACA. Under the Affordable Care Act, people with lower incomes who buy insurance on the exchanges get a tax credit, so their costs remain stable as a share of their income.

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