A trade group for not-for-profit insurers warned congressional leaders on Wednesday that insurance premiums could rise by 20% if the lawmakers fail to fund cost-sharing subsidies in the federal budget.
In its letter to congressional lawmakers, the Alliance of Community Health Plans said funding of cost-sharing reductions is essential to stabilize the health insurance marketplace and will allow plans to set affordable premiums for 2018. The group estimates that without cost-sharing reductions, premiums would increase as high as 20% in some areas.
The Trump administration's proposed federal budget expires on April 28. It's unlikely Congress will reach a consensus and adopt the plan, as it proposes $18 billion in cuts to domestic programs.
Experts also believe that eliminating the cost-sharing subsidies would spur a drastic rise in premiums or an exodus of insurers from the exchanges. The Affordable Care Act requires insurers to reduce cost-sharing burdens for eligible members in silver plans, which would cost them tens of millions of dollars.
The cost-sharing reductions mandated under the ACA are designed to make healthcare affordable for people with incomes up to 250% of the federal poverty level without having to pay high deductibles and coinsurance. More than six million exchange plan members receive assistance through the cost-sharing reductions.
In the letter, ACHP CEO Ceci Connolly said removing cost-sharing reductions will make insurance unaffordable for many and would lead to a rise in the uninsured. She added that ACHP members have seen their populations' health improve as more people have gained coverage.
“If our most vulnerable customers – hardworking Americans – cannot afford even basic costs associated with co-pays and deductibles, it will be that much more difficult to improve the health of the local communities we serve,” Connolly said.
There have been reports in recent weeks that the Trump administration will continue to fund the cost-sharing reductions until a lawsuit questioning their legality plays out in court. The suit is currently on hold.
ACHP has 23 members, including large provider-based insurers like Kaiser Permanente, Geisinger Health Plan, SelectHealth and UPMC Health Plan.
