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Trump's cuts to Obamacare subsidies undermine patients, Pennsylvania critics say

Ben Schmitt
| Friday, Oct. 13, 2017, 1:51 p.m.
President Trump reacts to the AHCA health care bill being pulled by Congressional Republicans before a vote as he speaks about the bill in the Oval Office of the White House in Washington on March 24, 2017.
President Trump reacts to the AHCA health care bill being pulled by Congressional Republicans before a vote as he speaks about the bill in the Oval Office of the White House in Washington on March 24, 2017.

Pennsylvania Gov. Tom Wolf and insurance officials Friday lashed out at President Trump's decision to end cost-sharing reductions for low income citizens who buy health insurance on the federal marketplace.

"Republicans in Congress have scuttled a bipartisan effort to stabilize markets and control health care costs," Wolf said in a statement. "Now, President Trump is actively working to undermine the market and cause rate increases, raise costs on seniors, and take away protections for people with pre-existing conditions who need the individual market to get coverage."

America's Health Insurance Plans and the Blue Cross Blue Shield Association said in a joint statement that Trump's maneuvering could adversely impact 6 million health insurance consumers. Highmark is an independent licensee of the Blue Cross Blue Shield Association.

"These benefits help real people every day, and if they are ended, there will be real consequences," the statement said.

The Trump administration announced late Thursday night it's stopping federal subsidies for copays and deductibles in Obamacare plans. The president took to Twitter before dawn Friday to say Obama's federal health law is imploding and Democrats should call him to make a deal.

In a subsequent tweet, Trump asserted, "Obamacare is a broken mess. Piece by piece we will now begin the process of giving America the great HealthCare it deserves."

Late Friday, state Attorney General Josh Shapiro announced his office was joining other Attorneys General in a lawsuit against Trump.

"Our lawsuit alleges that, by stopping these payments unilaterally, President Trump has acted arbitrarily and capriciously and in clear violation of his legal responsibilities under the Affordable Care Act. And through his ongoing efforts to sabotage the ACA, he has failed in his constitutional obligation to take care that the laws be faithfully executed," Shapiro said in a statement. "The Affordable Care Act is the law of the land. It set up cost sharing reduction payments so Americans could have the ability to purchase individual health insurance plans on their own."

Sign-up season for subsidized private insurance starts Nov. 1, in less than three weeks, with about 9 million people currently covered.

"This action will make it harder for patients to access the care they need," the joint statement from America's Health Insurance Plans and the Blue Cross Blue Shield Association said. "Costs will go up and choices will be restricted."

Highmark Inc., which has requested substantial premium increases in Pennsylvania for 2018, said it "has long advocated for policies to stabilize the individual market, including insurance parameters that encourage the alignment of premium and risk, distinct funding for individuals with high medical costs and strong incentives to obtain and maintain health insurance coverage."

The insurer said it intends to urge leaders in Washington to promote health insurance choice and competition. Highmark and four other insurers that sell Obamacare plans in the state are requesting average increases of 8.8 percent for individual plans , according to the Pennsylvania Insurance Department.

"Our nation needs to drive for immediate action to address the way Americans pay for health care, focusing on longer-term issues of medical care cost drivers and work toward high-quality, value-based care. Private health insurers are leading these efforts today and will play a critical role in the future," Highmark said in a statement.

Caleb Wallace, senior director of health policy at UPMC Health Plan, said policies for its customers are not going to skyrocket in 2018. He said UPMC has 140,000 Affordable Care Act members in the 29 counties of Western Pennsylvania.

"Collectively, we were out in front of this," he said. "We worked closely with the insurance department and this is something we had forecasted as a possibility. Pennsylvania should be better positioned than other states to weather this without adverse consumer impact."

Wallace said most increases will impact consumers signed up for the UPMC's silver plans. Still he called those increases modest for 2018. Plans are classified as bronze, silver, gold and platinum according to the level of benefits they offer; bronze plans are the cheapest and platinum the most expensive.

Of Trump's announcement, he said, "It scares consumers and has potential to make them think they aren't going to have access to affordable coverage. We want people to understand that Pennsylvania has some of the most affordable plans in the country.

"We want consumers to shop and talk to carriers and agents and consider all options on and off the marketplace. There will be affordable options."

Pennsylvania's Acting Insurance Commissioner Jessica Altman said cost-sharing reductions are not a bailout to insurance companies, but part of an agreement to help low income people afford health insurance with lower out-of-pocket costs like co-pays and deductibles.

"Insurers are still required to offer these lower costs whether cost-sharing reductions are paid or not, and we have worked closely with our individual market participants to ensure adequate rates are in place for the 2018 plan year," she said. "However, by choosing this moment to make a definitive statement that CSR payments cannot legally be made, it reneges on expectations insurers had when establishing rates for 2017."

U.S. Sen Bob Casey, D-Scranton, called on Congress to reverse what he described as a "sabotage" on the health care system.

"The only result of this cruel action will be to hurt people," Casey said. "This decision will raise premiums and cost middle class families their hard-earned dollars while wreaking havoc in the insurance marketplace."

Antoinette Kraus, Executive Director of the Pennsylvania Health Access Network, said Trump's move could impact 233,000 Pennsylvania residents.

"In many states, rates are certain to increase and some insurers may leave the market," she said. "In Pennsylvania, however, proactive planning on the part of the state's Insurance Department means that no insurers will leave the market, although rates are likely to increase by a bare minimum of 20 percent."

She asked Congress to intervene.

"PHAN calls on lawmakers in Congress to intervene and immediately appropriate the funds to make these critically important financial protections permanent," Kraus said.

Ben Schmitt is a Tribune-Review staff writer. Reach him at 412-320-7991, or via Twitter at @Bencschmitt. The Associated Press contributed.

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