Democratic Gov. Tom Wolf's administration is blaming President Donald Trump for a sharp increase in the cost of health insurance that'll take effect next year for residents who buy individual plans.
Wolf's administration released the approved 2018 rates Monday, saying the average increase will be just over 30 percent. Wolf's office said the increase would've been less than 8 percent if Trump hadn't halted cost-sharing reduction payments to insurers or created uncertainty around the fate of the individual mandate.
In a statement, Wolf accused Congress of being complicit in the rate increases because it didn't pass a bill to pay for the Affordable Care Act's cost-sharing reduction payments.
Trump said in July that his administration would “let Obamacare fail,” and critics argue the elimination of cost-sharing subsidies will hasten that demise.
“The administration continues to use people and families as political pawns to say the Affordable Care Act is failing,” said Acting Insurance Commissioner Jessica Altman.
ObamaCare is a broken mess. Piece by piece we will now begin the process of giving America the great HealthCare it deserves!
— Donald J. Trump (@realDonaldTrump) October 13, 2017
“The two main criticisms of the Affordable Care Act marketplace were that not enough plans were participating and that premiums were too high, and this policy change … will worsen both of those problems,” said Julie Donahue, a professor of health policy with the University of Pittsburgh Graduate School of Public Health.
Altman said the department is working to shield most consumers from the steepest increases by loading cost increases onto silver level plans. Increases for those plans are likely to be greater than 30.6 percent, while other plans will see more modest price hikes.
Since tax credits are tied to premiums, Altman said this scheme will reduce the overall impact on Pennsylvania consumers’ bottom line.
“For those consumers that are subsidized, that will maximize the tax credit available to them, while mitigating the increase on non-impacted plans including other medal levels – bronze, gold and platinum – as well as off-exchange only plans,” Altman said.
She said about 80 percent of Pennsylvanians qualify for tax credits and that the 85,000 people who don’t qualify could choose a different plan.
Caleb Wallace, senior director of health policy and assistant counsel at UPMC Health Plan, said the company aims to maintain stability for consumers.
“This change in particular, given the nature of the change and its context and timing with everything else that’s going on, it’s a little bit disheartening because of the added complexity and confusion we see it causing for consumers,” he said.
Wallace said the state Insurance Department’s was “forward thinking” in anticipating such a move from the Trump Administration. The department reported the rate hikes to the federal government at the end of September.
The Congressional Budget Office released a report in August that found that the elimination of cost-sharing subsidies would actually increase the federal deficit by $6 billion in 2018 and $26 billion in 2026.
Open enrollment for 2018 starts Nov. 1 and people must sign up by Dec. 15 for coverage that's effective Jan. 1. Increases in small group plan rates will average 7.6 percent in 2018.