“The failure of the administration and the House to bring certainty and clarity by funding CSRs has caused our company to file a 22.9 percent premium increase, rather than one that is materially lower,” Wilson told me. “That will impact hundreds of thousands of North Carolinians.” The company says it has approximately half a million customers getting individual insurance via Obamacare.
“We filed a 22.9 rate increase for 2018 based on the assumption that the CSRs will not be in place,” Wilson also said. “The rate increase would be 8.8 percent if the CSRs were guaranteed for 2018. Because they are not, the rate is 22.9 percent.”
Trump has repeatedly threatened to cut off the CSRs. Doing so could cause many insurers to exit the market, potentially costing millions their insurance, while causing others to dramatically hike premiums. The administration paid them for May, but officials continue to refuse to say whether the payments will continue after that. The CSRs are tied up in court: House Republicans sued to stop them under Barack Obama, whose administration appealed the decision, and the payments continued pending the appeal, but the Trump administration has not said whether it will continue the appeal (dropping it would cause the payments to halt), and recently asked for a 90-day delay from the court while it mulls their fate. But this has only injected further uncertainty, and while some Congressional Republicans have said they think the funds must be appropriated to stabilize the situation, there’s no sign whether they actually will.
But it must be stressed that Trump’s own stated rationale for threatening to cut off the payments is just nonsense. The threat appears rooted in pique over the failure to secure the “win” of repeal. Trump has repeatedly said the threat will force Democrats to the table to make a deal on Obamacare’s future. But Republicans are currently pursuing a repeal-and-replace plan that would do a lot more damage to the law than ending the payments would, so it’s unclear why any Democrats would join them in that effort, in response to a threat to do relatively less (though still severe) damage. The only conceivable way Dems could make a deal with Trump is if he were open to fixing, rather than repealing, the law, which he isn’t.
Thus, the only thing Trump’s threat is really accomplishing is to drive up premiums for people. Even worse, the news out of North Carolina previews what could happen with other insurers in other states if Trump actually goes through with the threat to cut off the CSRs, and congressional Republicans don’t appropriate the money. The key point is that Blue Cross Blue Shield North Carolina is acting on the assumption that the CSRs will not be there. And in that scenario, the company has decided, massive premium hikes are necessary. So, if it comes to pass that the CSRs actually aren’t there, you will see similar premium hikes across the country.
“The effect will be the same across the country,” Wilson predicted. “Rates will be materially higher if CSRs aren’t funded.” Indeed, a recent Kaiser Family Foundation study found that insurers would likely boost premiums on average nationally by 19 percent on some plans to compensate for it if the CSRs are halted.
One last point: This whole dynamic shows that one of the leading GOP health care talking points is also complete nonsense. Paul Ryan loves to say that Republicans are performing a “rescue mission” by stepping in to save people from the allegedly collapsing ACA by replacing it, and that they don’t want any people to be hurt in the transition. As it is, their “rescue mission” would result in 23 million people losing insurance over 10 years, and in soaring premiums for sick people, with many priced out of the market. But that aside, if their own stated goal is to avoid hurting people during the transition, it’s unclear why they would not fund the CSRs, since the failure to do so is going to hurt untold numbers of them.
* THE CSR DEBATE, IN ONE CHART: Here is a chart supplied by Blue Cross Blue shield North Carolina that explains their decision: