RI insurance regulator OKs ‘Trump tax’ increase on enrollees

Oct. 26--CRANSTON, R.I. -- Blaming President Trump for eliminating the subsidies to health-insurance companies that have reduced out-of-pocket costs for low-income people, Rhode Island's health insurance commissioner this week approved premium increases that could reach as high as 43.5 percent for some enrollees in Rhode Island's Obamacare program.

The premium increases approved by state Health Insurance Commissioner Marie Ganim only apply to individuals enrolled in the "silver" plans that Blue Cross & Blue Shield and Neighborhood Health Plan offer through the state health-insurance exchange known as HealthSource RI. In February, the number of individuals in this category totaled 21,066.

Slated to take effect on Jan. 1, the increases will average 18 to 20 percent, after two cumulative rounds of premium hikes since August.

But the magnitude of these premium increases will, in actuality, vary widely depending on which health-coverage options a subscriber chooses, ranging from a possible 18.4 percent increase for coverage by Neighborhood Health to a high of 43.5 percent for the most generous of the BCBS "silver" plans, according to information provided by Cory King, chief policy analyst for the state Office of the Health Insurance Commissioner.

In a joint statement, HealthSource RI and the health insurance commissioner's office blamed Trump's "reckless decision" to end a federal government subsidy -- known as a cost-sharing reduction payment. In Rhode Island alone, this subsidy funneled $18 million to the two insurers taking part in the HealthSource RI health exchange to reduce the co-pays and deductibles charged low-income people who qualify for reduced-price coverage.

The joint statement denounced Trump's move -- announced earlier this month -- as "the latest attempt by the administration to sabotage the Affordable Care Act," which was former President Barack Obama's legacy.

"Because of action taken by the President, individual market rates for 2018 will now include a "Trump Tax," they said.

Echoing that sentiment, U.S. Sen. Sheldon Whitehouse said: "The higher price tags on many health insurance plans in Rhode Island for next year are squarely attributable to President Trump. These increases directly relate to his cutting the subsidies that have made health care affordable for working families. Even so, Rhode Islanders should not be deterred from purchasing health insurance, as tax credits and shopping around through HealthSource RI can help offset these needless premium increases," Whitehouse said.

Elaborating, OHIC's King said the office believes the higher premiums will entitle many, if not most of the affected subscribers, to larger tax credits that will lower their premiums, while putting the extra cost back on the federal government.

If it sounds like a government shell-game, it is. But not everyone will emerge unscathed.

"The amount a customer will pay is very individualized; some customers will see a significant increase in cost, others will see little to none. It is dependent on family size, income and plan selection," said HealthSource RI spokeswoman Kyrie Perry. "The 15 percent of our customers that do not have financial assistance will be most impacted, however, the entire HSRI customer base will be seeing some impact based on eligibility."

"We are encouraging customers to actively shop when Open Enrollment begins on November 1," said HSRI director Zach Sherman. To make the decision-making easier, he said, "HealthSource RI is launching a new Savings Calculator to help Rhode Islanders ... to factor in their desired maximum out-of-pocket cost and expected health needs among other things, which is even more critical as plan options will look different this Open Enrollment."

Some history: R.I.'s health-insurance commissioner approved a first round of premium increases in August that averaged 12.1 percent for Blue Cross & Blue Shield and 5 percent for Neighborhood Health, but asked the two insurers to ready, in advance, the rate requests they would file if the Trump administration made good on its threats to eliminate the cost-sharing-reduction payments.

It's complicated. But "the insurers were asked to focus their premium rate increases on Silver-level plans sold on HSRI's individual market ... because the cost of these plans determines the dollar amount of federal ACA tax credits relative to consumers' income," according to Wednesday's statement. The thinking: "The premium rate increases on these plans will be absorbed by the ACA tax credit for most HSRI customers."

Several other states are taking the same approach to protect as many consumers as possible, OHIC and HSRI said in their joint statement.

-- kgregg@providencejournal.com

(401) 277-7078

On Twitter: @kathyprojo

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