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April 12, 2017 01:00 AM

Business lobby urges Trump to quickly fund insurance stabilization payments

Harris Meyer
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    President Donald Trump

    A powerful business group unexpectedly joined insurance and provider groups Wednesday in urging President Donald Trump to take quick action to fund Affordable Care Act payments to insurers and prevent a meltdown of the individual market.

    But Trump told the Wall Street Journal Wednesday that he might withhold the payments to force congressional Democrats to negotiate a healthcare deal with Republicans. "I don't want people to get hurt," he said in an interview. "What I think should happen – and will happen – is the Democrats will start calling me and negotiating."

    The U.S. Chamber of Commerce, which previously supported a rollback of the ACA, co-signed a letter to Trump calling on him to stabilize the ACA's individual markets for 2017 and 2018. The letter asked him to lock in federal payments to insurers for the ACA's required cost-sharing reductions for lower-income marketplace enrollees.

    The other signers were America's Health Insurance Plans, the American Academy of Family Physicians, the American Benefits Council, the American Hospital Association, the American Medical Association, the Blue Cross Blue Shield Association and the Federation of American Hospitals. Most of those groups generally support the ACA.

    The letter expresses the growing panic throughout the healthcare and business communities over the potentially cataclysmic impact of the failure so far of the Trump administration and Congress to resolve the cost-sharing reduction issue. House Republicans won a lower federal court ruling upholding their position to end the payments. Trump has until next month to decide whether to continue the Obama administration's appeal of the ruling. Republicans are split on whether to do anything to prevent the markets from collapsing.

    Insurers must decide within the next two months whether to offer individual-market plans for 2018 and how to price them. If the cost-sharing reductions aren't funded, insurers would have to eat those losses, sharply jack up premiums for 2018, or exit the market. That could leave as many as 20 million Americans without affordable coverage options.

    The cost-sharing reduction payments are expected to total about $7 billion this year. Nearly 60% of all ACA exchange enrollees receive this financial assistance with their deductibles and other out-of-pocket costs. To qualify, people have to sign up for a silver plan and have income no higher than 250% of the federal poverty level.

    The groups signing the letter to Trump said "the window is quickly closing to properly price individual insurance products for 2018."

    They warned that if the cost-sharing reductions aren't funded, health plans will pull out of the market; 2018 premiums both on and off the exchanges will spike by at least 15%; providers will be strained by having to deliver more uncompensated care; employers offering health benefits will be hit by cost shifting resulting from that unpaid care; and federal spending for the ACA's premium subsidies will jump.

    The Republican-leaning Chamber of Commerce has been a relatively moderate opponent of the ACA. During the Obama administration, it supported changes to the law's employer mandate and health insurance premium tax rather than calling for full repeal. Other business groups such as the National Federation for Independent Business and the National Retail Federation aggressively backed complete erasure of the law.

    But the Chamber did run an expensive advertising campaign last year attacking Democratic Senate candidates for their support of Obamacare.

    Trump, in the interview Wednesday wouldn't say whether he thought Congress should approve funding for the cost-sharing payments or if he would end the payments by dropping the appeal. Senate Democratic leader Charles Schumer "should be calling me up and begging me to help him save Obamacare," Trump said.

    Most political observers doubt the Democrats will negotiate any deal unless Trump reaches out to them and promises to drop his efforts to repeal and replace the ACA.

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