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Trump Health Insurance Order Could Mean Bigger Rate Increase In Pennsylvania

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J. Scott Applewhite
/
AP
Pennsylvania residents received $214 million in federal health insurance subsidies last year, which could be in jeopardy under President Donald Trump's proposal.

Democratic Gov. Tom Wolf, Pennsylvania's leading hospital association and advocates for the poor all reacted strongly Friday to a move by the Trump administration to stop paying cost-sharing subsidies that have helped lower the price of health insurance policies sold through the Healthcare.gov marketplace.

More than 500,000 Pennsylvanians who buy insurance in the individual market could see premiums spike by more than 20 percent during 2018, said Andy Carter, president and CEO of the Hospital and Healthsystem Association of Pennsylvania.

That, he said, could price many people out of the market for insurance.

"We implore Congress to take swift, bipartisan action to protect consumers from these steep premium increases and help support a robust and competitive insurance market," Carter said.

Pennsylvanians received $214 million in federal subsidies last year, with 234,000 enrollees — or more than more than half of the people covered by insurance through Healthcare.gov — benefiting from them, according to federal data. That's about $915 per enrollee for the year.

Wolf and Antoinette Kraus, executive director of the nonprofit Pennsylvania Health Access Network, each accused President Donald Trump of working to destabilize health insurance markets.

In announcing the decision late Thursday night, the Trump administration said the government cannot legally continue to make the payments.

The subsidies lower the cost of deductibles and copayments for policyholders with income low enough to qualify, up to 250 percent of the federal poverty level. Even without the federal reimbursement, insurers are required to offer the lower deductibles and copayments. But insurers have said they must raise premiums to account for the loss of the federal reimbursement.

Earlier this year, insurers asked Pennsylvania state regulators to approve an average 9 percent premium increase for 2018, a rate that assumed the federal government would continue paying the subsidies. Insurers proposed average rate increases of more than 20 percent without the subsidies.

The Insurance Department has not yet published final rates for 2018. Kraus said higher tax credits would make up for part of the cost of higher premiums, but policyholders would still end up paying more.