CBO score provides hope,but insurance market still unclear in state

Aug. 18--President Donald Trump agreed on Wednesday to pay Cost Reducing Payments for at least the month of August, a day after the Congressional Budget Office released its newest score showing eliminating CSRs wouldn't necessarily cause Affordable Care Act markets to "implode."

While the score shows the ACA could still stabilize after ending the payments, analyses from experts suggest that rural counties in states like Kentucky could see immediate fallout.

Trump has spoken publicly and through Twitter frequently about eliminating "bailouts," which many experts assume refers to the payments made to insurance companies from the federal government to reduce out-of-pocket expenses. It's an effort to force Democrats and disgruntled Republicans to come back to the negotiation table.

"If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!" Trump said in a July 29 tweet.

Ending CSRs had been one of the easiest strategies the president had in disrupting the exchanges since Congressional Republicans sued the Obama administration in 2015 over an interpretation in the ACA about how the payments would be appropriated.

This has caused speculation among insurance providers across the country, including Anthem Health Plans of Kentucky and CareSource, the only two providers offering individual plans on the ACA marketplace in Kentucky.

Anthem, the only company that currently covers every Kentucky county in the individual marketplace, has announced it will leave the exchanges in Ohio, Indiana and Wisconsin, in addition to Nevada and Virginia.

Dustin Pugel, research and policy associate at the Kentucky Center for Economic Policy, said the economic factors Anthem would have considered in those decisions are similar to what can be found in Kentucky if speculation over CSRs continues.

"The counties that have experienced the most loss in insurers are rural, sparsely populated counties," Pugel said. "Kentucky has a lot of those kinds of counties. The likelihood of the companies pulling out are pretty good since there would just be so few people for them to do business with."

The CBO score also reports trends that highlight potential problems for insurers, beyond picking up the bill for rural customers, using plans with CSRs. With higher premiums, the CBO predicts it would be easier for more affluent customers eligible for reductions to switch to a gold plan or move away from the exchange, reducing the risk pool for companies.

Pugel said this disruption in the market could make counties with large amounts of customers on CSR plans a likely target for companies moving away from risky coverage areas.

"You need a certain number of people to predict accurately how you can afford to pay claims," Pugel said. "If those customer pools are distributed, it's more likely that counties on plans that require tax credits or payments would lose coverage."

In its filing statement to the Kentucky Department of Insurance in June, Anthem listed options a company would have to take in the state market if CSRs were eliminated.

"Such adjustments could include reducing service area participation, requesting additional rate increases, eliminating certain product offerings, or exiting certain Individual ACA compliant markets altogether."

Mark Robinson, Kentucky's public relations director for Anthem Blue Cross Blue Shield, could only confirm the company was still reviewing its options during the filing process at this time.

"As you know, we filed rates which are currently under review and we remain engaged as the regulatory process continues," Robinson said in an email.

Michael Taylor, executive director of CareSource in Kentucky, said the company still plans to offer coverage in its current 61-county area. Taylor added CareSource was hopeful the federal government would continue CSR funding.

"CSRs are critical to the sustainability of the Marketplace providing affordable health care coverage," Taylor said. "Our biggest concern is that if CSRs are taken away, consumers who want and need health care coverage will be priced out of the Marketplace because they are unable to afford their premiums."

Anthem and CareSource have filed rates for Silver plans with 34.1 percent and 20.8 percent increases in premiums, respectively.

Silver plan packages include CSRs and provide medium-level coverage, with reduced costs on a sliding scale for people below 250 percent of the federal poverty limit, or $60,750 a year for a family of four.

Silver plans are used by more than half of the 81,155 Kentuckians enrolled in the ACA market, with 71 percent of silver plan enrollees receiving CSRs.

In the state's poorer, rural areas -- five counties in eastern Kentucky with the worst health outcomes -- more than 70 percent of Kentuckians on the exchange receive CSRs.

The CBO score predicts that rises in premiums because of the lack of CSRs will actually drive ACA exchange participation by 2020 as consumers decide to leave group insurance from employers to comparatively cheaper plans on individual market.

Coverage areas have already begun to fill in, with only two rural counties in Ohio and Wyoming still lacking an insurer on the exchanges.

While the CBO predicts the market can remain stable if CSRs end, it also posits 1 million fewer insured Americans per year starting in 2020, mostly affecting poorer populations.

Jacob Dick, 270-228-2837, [email protected],Twitter: @jdickjournalism

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