Trump's Obamacare cuts mean higher rates for Michiganders

President Donald Trump's decision to stop subsidies to insurers to offset costs under the Affordable Care Act will fuel higher rates for all Michiganders on the program and could directly impact more than 150,000 people in the state.

Trump went on Twitter this morning to declare that the Affordable Care Act — otherwise known as Obamacare — "is imploding" and said "massive subsidy payments ... has (sic) stopped." His administration announced Thursday night it would cease making cost-sharing payments to insurers under the program.

The administration had long been expected to discontinue the payments, which are intended to help recipients who don't qualify for Medicaid but make up to 2 1/2 times the federal poverty rate keep down premiums, deductibles and other out-of-pocket costs. Republicans three years ago sued to stop the subsidies saying the funding had never been formally appropriated by Congress.

That decision won't immediately be felt by the roughly 320,000 Michiganders who signed up for individual or small group coverage under Obamacare this year because they have contracts with their insurers for now. But it will add to even higher rates next year for many if not all of them unless Congress steps in and restores the funding.

As the Free Press has reported, health insurers providing individual policies under the Affordable Care Act are expecting to raise premiums in Michigan next year by an average of 27.6% under the assumption that Trump would stop the cost-sharing payments to insurers.

The state hasn't formally signed off on new rates and has until Nov. 1 to do so. But the state had already asked insurers selling coverage under Obamacare to provide two sets of possible rates for next year: one with the cost-sharing payments remaining in place and one without them.

Trump's move means those even-higher rates are likely to be the ones enacted.

Open enrollment for individual health policies in 2018 will start Nov. 1 and run to Dec. 15. That is half as long as last year's enrollment period. 

Blue Cross Blue Shield of Michigan, the largest insurer in the state, said earlier this year that it was looking to raise individual plan rates by a statewide average of 26.9% and an average of 13.8% for Blue Care Network HMO plans and said those increases would be even higher if cost-sharing subsidies were discontinued.

Daniel Loepp, president and CEO of Blue Cross Blue Shield of Michigan, said today he was "disappointed" in the decision and left no doubt that it means higher premiums that will be "particularly challenging for the working class."

He added that, unlike some other insurers across the country, Blue Cross Blue Shield of Michigan "has no intention of the leaving the market because of this action" but said that "coverage will be significantly more expensive."

There are even concerns that the loss of cost-sharing subsides could hurt employer-provided coverage -- which accounts for slightly more than half of all coverage in Michigan, according to data from the Kaiser Family Foundation.

The American Benefits Council, a group which represents large U.S. employees including General Motors, Ford Motor Co., Dow Chemical and hundreds of others on benefits issues, said the change could lead to a less stable individual insurance market, which in turn "could result in further cost-shifting from health care providers to large employer plans" as well as damaging plans created in part to help early retirees, part-time workers and others.

"This is a big deal, not just for recipients of the subsidies but for everyone with health insurance," said the council's president, James Klein.

Officials in 15 states -- including California, New York and Massachusetts -- said they would file a lawsuit against the Trump administration over the discontinued subsidies. Michigan isn't among them.

Based on federal data for the current year, more than 150,000 Michiganders were eligible for cost-sharing reductions, down somewhat from the more than 175,000 Michiganders in 2016 with insurance purchased through the Affordable Care Act exchange who received the benefit of the cost-sharing subsidies.

Those recipients are spread across the state, with the largest numbers in Oakland (23,814), Wayne (22,665) and Macomb (19,192) counties. But there were also sizable numbers in other areas, including Kent County (9,172), Washtenaw (5,214) and Genesee (4,578) counties as well.

Congressional district data wasn't immediately available for the current year but looking at 2016, Michigan's 9th congressional district in Oakland and Macomb counties — represented by U.S. Rep. Sander Levin, D-Royal Oak — had the largest number of cost-sharing recipients, with 22,347.

Districts represented by Republicans had large numbers of recipients that year, too.

They included U.S. Rep. Tim Walberg, R-Tipton, in Michigan's 7th district in south central Michigan, which had 17,143 cost-sharing recipients, and U.S. Rep. Jack Bergman, R-Watersmeet, in the 1st district in the northern lower peninsula and Michigan's Upper Peninsula, with 16,475 recipients.

Democrats roundly criticized the move today -- as they had his decision Thursday to allow more Americans to buy potentially less broad coverage via association plans it -- and his remark on Twitter that in light of Congress' failure to repeal and replace Obamacare he would do so, "piece by piece."

U.S. Rep. Dan Kildee, D-Flint Township, said Trump's actions are "actively undermining our health care system and causing instability" leading to a situation where Michiganders could see huge year-over-year costs. U.S. Rep. Debbie Dingell, D-Dearborn, called it a "spiteful decision" that "does nothing to improve care or bring down costs for the American people."

U.S. Sen. Gary Peters, D-Mich., accused Trump of "playing politics with Michiganders' health care." U.S. Sen. Debbie Stabenow, also D-Mich., criticized it as well.

Levin, who helped pass the Affordable Care Act as a former chairman of the House Ways and Means Committee, said Trump "is continuing his hateful efforts to deny or disrupt health coverage for American families. His most recent decision to end needed federal assistance to help reduce out-of-pocket medical expenses will directly increase costs for millions of middle-class and moderate-income families." 

Some Republicans were slower to respond but U.S. Rep. Paul Mitchell, R-Dryden, suggested it was necessary given that in many states premiums have increased significantly and insurers have left the Obamacare market, reducing consumers choices.

"Obamacare is failing, and throwing more money at this law will not save it," said Mitchell. "The system Obamacare created is flawed and we need substantive reform to ensure everyone has access to quality health care."

Kelli Ford, a spokeswoman for U.S. Rep. Mike Bishop, R-Rochester, said Trump has reiterated that it's up to Congress to solve the legal questions surrounding the cost-sharing payments and that President Barack Obama's administration had "completely overstepped their constitutional authority" by ordering them.

"We are waiting to receive more information about the instructions of this order and what it means for Michigan," she said. U.S. Rep. Bill Huizenga, R-Zeeland, also questioned the legal authority of the payments, saying, "The Constitution is crystal clear on this matter. Congress, not the Executive Branch, controls the purse strings."

Others said whatever happens, the people who have come to need Obamacare should be protected.

“We need to find a permanent (and) legal legislative solution that provides certainty for Americans, and that includes ensuring we do not pull the rug out from under the people who have come to rely on this broken system," said U.S. Rep. Dave Trott, R-Birmingham, who last month announced that he'll step down after his current term.

U.S. Rep. Fred Upton, R-St. Joseph, said its up to Congress to "come together to legally fund these payments in order to keep those most vulnerable among us protected and covered." He said he would continue working with groups, including the bipartisan Problem Solvers Caucus -- a group which Bishop also recently joined -- to try to find a solution.

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