Mississippi insurance commissioner expects cost-sharing payments won’t last

Northeast Mississippi Daily Journal (Tupelo)

Aug. 16--TUPELO -- Despite analysis stating that ending cost-sharing reductions will cause Obamacare premiums to jump and increase the federal deficit, Mississippi's top insurance regulator anticipates they eventually will be eliminated.

"I don't think they will be renewed because of what's happening in Washington," said Mississippi State Insurance Commissioner Mike Chaney during the Health Care Reform Forum Tuesday night at the Link Centre in Tupelo.

An Associated Press report Wednesday said the government will make this month's payments to insurers under the Obama-era health care law that President Donald Trump still wants to repeal and replace, a White House official said.

Trump has repeatedly threatened to end the payments, which help reduce health insurance copays and deductibles for people with modest incomes, but remain under a legal cloud.

A White House spokesman said "the August payment will be made," insisting on anonymity to discuss the decision ahead of the official announcement. The so-called "cost-sharing" subsidies total about $7 billion this year and are considered vital to guarantee stability for consumers who buy their own individual health insurance policies.

It was unclear Wednesday if the payments from the federal government would continue past August. {span}Insurers say they want to the administration to do more, and guarantee the payments at least through next year.{/span}

The Congressional Budget Office on Tuesday released its analysis on the impact of eliminating payments that help insurers reduce deductibles and copayments for low income people who purchase insurance through healthcare.gov. It estimated premiums would rise an average of 20 percent and the federal deficit would increase about $194 billion over a decade because subsidies increase automatically for those who qualify.

Currently Mississippi has one insurer in the federal health insurance marketplace, Magnolia Health Plan. At the insurance department's direction, Magnolia submitted rates on the assumption that the cost-sharing reductions would remain with the understanding that adjustments could be made if they were pulled, Chaney said. About 60,000 Mississippians access health care insurance on the exchange.

"Mississippi already has some of the lowest rates in the country," Chaney said, but he anticipated rates could go up about 25 percent without the cost-sharing reductions.

Another forum panelist, American Health Lawyers Association president Eric Zimmerman said it's clear that eliminating the cost-sharing reductions would unbalance the health insurance exchange.

"If they don't extend the cost-sharing subsidies, it's a substantial blow to the sustainability of the marketplace," Zimmerman said.

Zimmerman said it's hard to speculate about what course the administration will take because it has been unpredictable.

"The president considers himself a dealmaker," and the cost sharing subsidies are a bargaining chip, Zimmerman said. "It's not surprising he wants to push to the brink."

In its analysis of the effect of ending the cost-sharing reductions, the nonpartisan Congressional Budget Office looked at the payments, which total about $7 billion this year, which reimburse insurers for subsidizing the out-of-pocket costs for people with modest incomes, according to reports from the Associated Press.

It's a financial break that can cut a deductible of $3,500 down to a few hundred dollars. Nearly 3 in 5 HealthCare.gov customers qualify for cost-sharing help, an estimated 6 million people or more. But the money is under a legal cloud because of a dispute over whether the Obama-era law properly authorized the payments. Trump has been threatening to end the monthly payments.

The analysis found that exchange consumers who qualify for tax credits to pay for health insurance premiums will largely be shielded because the credits automatically increase. That increase in subsidies would offset the savings from not paying cost-sharing reductions.

Insurers, who have to sign contracts to offer plans on the federal exchange in late September, say they need a decision from the government now, before they lock down their rates for 2018.

The future of the Affordable Care Act was one of several aspects of health care reform addressed at the Tuesday forum in Tupelo. Nearly 90 people registered to participate in the four-hour event. State Sen. Hob Bryan gave an overview of Medicaid, including how Mississippi leverages federal dollars to pay for the program and how far-reaching the economic impact is. Retired health care executive Gerald Wages spoke about the need to change the way hospitals and doctors are paid to reform the system.

Whether it is Medicaid expansion or cost-sharing reductions, decisions are often made on short-term costs instead of long-term impact, said Mississippi Hospital Association chief executive officer Tim Moore.

"In the current situation, the biggest challenge is cutting expenses," Moore said. "Everything is driven by dollars."

The Associated Press contributed to this story.

michaela.morris@journalinc.com

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