Trump’s Latest Tactic Will Make Your Insurance Premiums Spike

Over the weekend, the Centers for Medicare and Medicaid Services quietly rolled out an announcement that will have a huge impact on the price of your insurance premiums in 2019: The agency is refusing to fund the risk adjustment payments used to stabilize insurance pricing.

CMS claims that a court ruling made this necessary, although critics say this is an overly broad interpretation of a recent decision in a New Mexico court — one that happens to conflict with a finding in a Massachusetts court. Instead, it serves as yet another salvo designed to undermine the Affordable Care Act, turning it into a failure by deconstructing the measures insurance companies themselves support.

The purpose of risk adjustment payments is to acknowledge that the ACA requirement of universal coverage for everyone without differential pricing carries increased risk for insurers: Some patients will consume a lot of health care resources in a given year, while others will not. The ACA laid out several methods of “risk adjustments,” in which funds are transferred to insurance companies to insulate them from the risk of taking on patients with significant health needs.

One is via assessment to determine if insurance companies need this financial support at all — or if their position is comfortable enough to justify assessing fees to redistribute. The other element involves subsidies from the federal government, worth over $10 billion, to offset pricing. This keeps premiums lower for everyoneas without this insulation, insurance companies — notoriously risk-averse — might radically increase prices.

And once those prices are locked in for 2019, with insurance companies receiving contracts to approve or decline in the coming months, that’s it — until rate setting in 2020.

The court case revolved around the question of how this assessment is performed. The Massachusetts judge upheld the decision, while the New Mexico judge did not. The government, perhaps unsurprisingly, is using the finding that supports their own opinion on the ACA as the grounds for this policy decision.

The timing for this move is not ideal — and some might even say its calculated. Right now, insurance companies are determining their rates for 2019. This change in policy will likely lead many to increase the costs of individual premiums, which have already been going up in response to Trump-induced instability.

And if you get insurance through an employer, you’re not insulated from sticker shock. These costs will go up too, which could be a big problem for small businesses that aren’t prepared to absorb them. Your employer may revisit the benefits provided and/or your share of cost.

Furthermore, this is also the chance for insurance companies to decide whether they want to be involved in ACA marketplaces. Some may opt out in the face of growing evidence that the Trump administration’s active hostility to the ACA is translating into devastating policy decisions.

Blue Cross Blue Shield has already warned that the change will cause premiums to increase and may limit the types of plans available. This may be very much by design, as conservatives have made no secret of their loathing for the Affordable Care Act.

From a fiscal perspective, their outrage is illogical: Increasing insurance coverage across the board is much more cost effective than dealing with the costs of providing care to uninsured people, an it incentivizes preventative health care that allows people to lead more productive lives. Kathleen Sebelius, who served as Secretary of Health and Human Services under President Obama, noted that the ACA also resulted in consumer savings of over $2 billion.

Photo Credit: Elvert Barnes/Flickr

46 comments

Mary B
Mary B4 months ago

The next time anybody blames Obama for something he is not guilty of, may they get zaped in the heart with a bolt of truth so powerful it will knock them over.And it will keep happening untill they stop it.

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David F
David F4 months ago

Winn A. That demonstrates the power of Fake News, especially the overseas socialist News. So may victims.

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Sheila Miller
Sheila Miller4 months ago

Trump does not care for the average American. He is only interested in profit for himself and the rich. I am so happy to see England's protests against Trump. Other countries see how awful he is for the United States.

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Winn A
Winn Adams4 months ago

I just watched the protesters in England against tRUMP on CNN & MSNBC. Thousands are taking to the streets and time away from work to protest and I'm glad for it. tRUMP is an embarrassment to America and the World. He is a cancer on America and the World. When will this nightmare end? Vote BLUE in all elections and RESIST.

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Winn A
Winn Adams4 months ago

Never give up the fight against the corrupt president and his administration.

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Debbi W
Debbi W4 months ago

Everyone must vote in November! We have to replace the greedy republicans and stop trump. If I can't afford medicare, it will mean a death sentence. In that case, I would seriously consider having my ashes dumped on Mar-a-Lago when trump was there.

He is determined to kill off the poor young and old. The middle class will be attacked next.

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Angela G
Angela G4 months ago

ok

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Karin H
Karin Hanson4 months ago

The Mango Maggot is determined to send the US economy spiraling out of control..... anyone who is not a multi-millionaire will certainly suffer the effects of eventually becoming part of the "poorer" class, unable to afford such things as medical/hospital care, insurance, etc., etc. WAKE UP people!!

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Shirley S
Shirley S4 months ago

Australia is having problems with health care matters. People are thinking twice about having expensive scans etc.

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Debra G
Debra G4 months ago

There is so much shite this regime is doing. They just cut the grants to the outreach groups signing people up for health insurance and removed information from the Medicaid.gov website.

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