A number of major healthcare and business groups, including the U.S. Chamber of Commerce, urged Trump in a letter last week to continue the cost-sharing reduction payments. The letter warned that without the subsidies, consumers, providers, insurers and employers will suffer.
An estimated 20 million Americans buy insurance in the individual market, and many of them could lose access to affordable plans if the cost-sharing reduction payments aren't continued and insurers either raise rates or exit the market, experts say.
A federal district judge in a lawsuit brought by House Republicans found the federal payments for the cost-sharing reductions unconstitutional. Trump could drop the Obama administration's appeal of the ruling and halt the payments. He warned last week that he might do that if Democrats don't negotiate with him on repealing and replacing the ACA.
Some 7 million people receive the subsidies, or 58% of those who signed up for Obamacare coverage for 2017. The payments are expected to cost $7 billion this year.
"There is still too much instability and uncertainty in this market," Marilyn Tavenner, president of America's Health Insurance Plans, said in a written statement after the HHS market stabilization rule was released. "Health plans and the consumers they serve need to know that funding for cost-sharing reduction subsidies will continue uninterrupted." AHIP is among the organizations that signed the letter to Trump.
The final rule reduces how much insurers pay for plan members' medical costs in the average silver plan. Right now, silver plans must cover at least 68% of costs, with the rest coming out of consumers' pockets. The rule cuts that percentage to 66%, which could lower premiums but increase out-of-pocket costs by as much as $1,000 a year.
To offset these costs, the administration suggested increasing by $200 million to $400 million the cost-sharing subsidies provided to enrollees in 2018.
That move shows "an inconsistency between the rule and what Trump is saying," said Topher Spiro, vice president for health policy at the liberal Center for American Progress.
Tim Jost, an emeritus law professor at Washington and Lee University, said the rule's reference to additional cost sharing subsidies does not bind the CMS to actually make the increased payments to insurers.
The appeal of the House Republicans' lawsuit, House v. Price, is on hold until May 22. It's not clear what the Trump administration intends to do. Congressional Republicans could appropriate the money for the cost-sharing reductions, but conservatives are likely to reject any action to shore up the ACA markets. The Trump administration is reportedly divided on the next steps to take.
The HHS final rule included other changes that concern the insurance industry. It shortened the 2018 enrollment period from three months to six weeks, from Nov. 1 to Dec. 15.
Kaiser Permanente said in a comment posted on March 6 that the shorter enrollment period would lower sales, which could lead to higher premiums. Experts say there's a risk it will hurt enrollment among highly coveted younger, healthier consumers, who often sign up at the last minute.