Insurance Commissioner condemns Trump Administration actions destabilizing health insurance markets
SACRAMENTO, Calif. – In an interview yesterday with the Wall Street Journal, President Trump suggested an intention to hold hostage the cost-sharing subsidies that make it possible for low-income Americans to afford to seek medical care when they need it. Responding to these comments, Insurance Commissioner Jones said: “The cost-sharing subsidies, an important part of the Affordable Care Act, lower deductibles and other out-of-pocket costs to make healthcare more affordable. President Trump’s threats to withhold the cost-sharing assistance create fear among consumers and instability in the health insurance market. President Trump’s stated intention to hold hostage for political gain the healthcare of millions of Americans who rely on cost-sharing assistance is outrageous. We can expect rates to increase and insurers to leave the market because of President Trump’s actions undermining the Affordable Care Act.”
Today, the Trump Administration took additional steps to destabilize the health insurance market. The misnamed “market stabilization” rules sabotage the Affordable Care Act by significantly reducing the open enrollment time period and creating other conflicts with state laws. Like President Trump’s threats to eliminate the cost-sharing subsidies, his new regulations will destabilize, rather than strengthen, the health insurance market.
The California Department of Insurance provided the U.S. Department of Health and Human Services (HHS) with comments when the rule was first proposed. In spite of these warnings, however, the rule issued by the Trump Administration:
- Shortens the open enrollment period for all states. The Commissioner and Covered California opposed this change and asked that at the very least, states with state-based exchanges not be prohibited from utilizing a longer open enrollment period. Data shows that those who sign up for coverage after December 16th, are more likely to be young, healthy people we need in the risk pool. Losing these purchasers will eventually result in higher rates for those who remain.
- Weakens the requirement that insurance policies provide real value (the “actuarial value” requirement). This change would make it more difficult for consumers to know the value of the policy they purchase in the individual or small group market, and encourages companies to engage in a “race to the bottom” to provide the lowest-value coverage possible. Such a change may also result in the Advance Premium Tax Credit being reduced in a state. Fortunately, the rule provides state flexibility, so California will be able to retain its current, robust actuarial value levels.
- Permits companies to refuse to enroll consumers in health insurance coverage if the consumer is behind on their premium payments, regardless of the reason for non-payment. California law already provides recourse for insurers in this situation. The new federal rule, however, creates an unnecessary barrier to maintaining insurance coverage.
- Lowers the requirement for the number of essential community providers that must be included in an insurer’s network. These providers serve historically underserved communities; lowering this requirement imperils care for those who otherwise have few options.