Donald Trump is actively sabotaging Affordable Care Act (ACA) insurance marketplaces, and it is costing the people of California. Today, the Covered California announced that, as a result of Trump destabilizing the market, a new surcharge is being added for silver plans on the health insurance exchanges in California that will increase rates by an average of 12.4% next year.

This news comes after Donald Trump has taken a host of executive actions that have harmed insurance markets and driven-up healthcare costs for Americans, including an executive order on Trump’s first day in office to compromise the effectiveness of the individual mandate, calling into question whether the mandate would be enforced at all, pulling an initial round of ACA enrollment ads that had already been paid for, cutting the overall enrollment ad budget by 90% as well as community outreach funds by 40%, halving the enrollment period in most states, and ceasing Health and Human Services participation in enrollment events.

Most damaging of all, Trump has repeatedly threatened to withhold cost-sharing reductions (CSRs), which are critical in order for 7 million working people to afford healthcare – and without which the premiums for benchmark marketplaces silver plans would skyrocket by up to 25%.

Trump is also expected to announce an executive order tomorrow that could greatly exacerbate the chaos in marketplaces he has already caused, devastating millions of Americans with preexisting conditions and driving healthcare costs upward across the country.

​”Donald Trump is sabotaging the Affordable Care Act marketplaces and now the people of California are going to pay the price. Trump’s efforts to deliberately undermine the insurance markets are hurting people right now, and his reckless behavior is unconscionable,” said American Bridge spokesperson Andrew Bates. “Californians deserve far better. It’s time for Donald Trump and Republicans in California to side with the vast majority of the American people who want them to work across the aisle to improve the Affordable Care Act instead of intentionally damaging the health insurance market.”

Trump himself has said that holding these payments hostage is a political negotiating tactic, and in an interview with The Wall Street Journal​ earlier this year​ Trump even acknowledged that acting on his threat would hurt people.The threat itself is hurting people in California right now.

Trump’s hostage strategy has destabilized American insurance markets at a time when health insurers face deadlines for the coverage they will offer consumers next year.  As a result, people in many places across the country – and now including California – will be hurt because of the completely needless uncertainty that Trump is causing.

The health insurance industry, as well as the American Medical Association, the American Hospital Association, and the U.S. Chamber of Commerce have called on Trump and congressional Republicans to fully fund these Affordable Care Act subsidies and calm insurance markets, but their request has been ignored.
THE FACTS

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TRUMP HAS THREATENED TO END AFFORDABLE CARE ACT COST-SHARING FUNDS:
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Wall Street Journal, 4/12/2017: “Nearly three weeks after Republican infighting sank an overhaul of the Affordable Care Act, President Donald Trump dug back into the battle on Wednesday, threatening to withhold payments to insurers to force Democrats to the negotiating table.”

​Axios, 5/2/2017: “Office of Management and Budget Director Mick Mulvaney reopened the debate over Affordable Care Act payments to insurers this afternoon, suggesting at a White House briefing that the Trump administration hasn’t decided whether to provide the May payments for cost-sharing reduction subsidies.”​

TRUMP’S THREATS ARE DESTABILIZING INSURANCE MARKETS :

America’s Health Insurance Plans, et al. in letter to Donald Trump, 4/12/2017: “A critical priority is to stabilize the individual health insurance market. The window is quickly closing to properly price individual insurance products for 2018. The most critical action to help stabilize theindividual market for 2017 and 2018 is to remove uncertainty about continued funding for cost sharing reductions (CSRs)….We urge the Administration and Congress to take quick action to ensure CSRs are funded. “​

​Additional organizations that signed the letter:​

• American Academy of Family Physicians
• American Benefits Council
• American Hospital Association
• American Medical Association
• Blue Cross Blue Shield Association
• Federation of American Hospitals
• U.S. Chamber of Commerce

America’s Health Insurance Plans, et al. in joint statement, 8/2/2017: “Cost-sharing reductions are used to help those who need it most—low- and moderate-income consumers. These funds, which are built into their benefits, reduce their out-of-pocket costs such as copayments and deductibles when they receive care. Without these funds, consumers’ access to care is jeopardized, their premiums will increase dramatically, and they will be left with even fewer coverage options.”

Additional organizations that signed the letter: 

• American Academy of Family Physicians
• American Benefits Council, American Hospital Association
• American Medical Association
• Blue Cross Blue Shield Association
• Federation of American Hospitals
• U.S. Chamber of Commerce​

TRUMP’S THREAT IS CAUSING INSURERS TO RAISE PRICES ON CONSUMERS​:

Congressional Budget Office, 9/14/2017: “In 2018, the agencies project, the average benchmark premium will be roughly 15 percent higher than it was in 2017, largely because of short-term market uncertainty—in particular, insurers’ uncertainty about whether federal funding for certain subsidies that are currently available will continue to be provided—and an increase in the percentage of the population living in areas with only one insurer in the marketplace.”

Des Moines Register, 8/16/2017: “Iowans who buy their own health insurance through the Affordable Care Act exchange would see their rates increase nearly 57 percent next year under a revised rate proposed Wednesday. The proposal is 13 percentage points higher than previously was estimated by Medica, the one remaining carrier selling individual policies in Iowa next year. Medica attributed the additional increase to uncertainties over federal health care subsidies, the insurer said in a release.”​

​Vox, 5/8/2017: “The administration has been aggressively ambiguous about key policy issues, like whether it will enforce the health care law’s individual mandate or pay out insurance subsidies aimed at the lowest-income Obamacare enrollees. In response, insurance executives tell Vox they will charge steeper rates in 2018 in order to avoid losing money. Others are quitting the marketplace altogether, saying the future just looks to uncertain to take a gamble.​”

Robert Laszewski, Health Policy and Strategy Associates, 5/8/2017: “Thehealth plans I work with want to stay in, but the Trump administration is not making that easy…”

Blue Shield of California CEO Paul Markovich, 5/8/2017: “It’s pretty clear we need more certainty to be able to file the rates assuming we get those federal payments…Short of that, we’d have to assume they’re not being paid.”

Avalere President Dan Mendelson, 5/10/2017: “The administration is leaving considerable uncertainty as to what’s going to happen next year…The [cost-sharing reduction] money is currently a significant political football that’s going back and forth, and that kind of uncertainty kills markets.”

Bloomberg, 5/9/2017: “Health insurers are asking for sharp increases in thecost of their Obamacare plans next year, thanks to instability in the law’s coverage markets that’s been compounded by the Trump administration.”

Bloomberg, 5/9/2017: “‘Failure to enforce the individual mandate makes it far more likely that healthier, younger individuals will drop coverage and drive up the cost for everyone,’ Chet Burrell, chief executive officer of CareFirst, said in a statement. The insurer is asking for an at least 50 percent increase in premiums in Maryland. Burrell said uncertainty over the mandate played a ‘significant role’ in the insurer’s rate requests.

ENDING ​COST-SHARING SUBSIDIES WOULD CAUSE HEALTH INSURANCE PREMIUMS TO SPIKE:

Congressional Budget Office, 8/15/2017: “Gross premiums for silver plans offered through the marketplaces would be 20 percent higher in 2018 and 25 percent higher by 2020—boosting the amount of premium tax credits according to the statutory formula”

​Kaiser Family Foundation, 4/6/2017: “​A new Kaiser Family Foundation analysis finds that the average premium for a benchmark silver plan in Affordable Care Act (ACA) marketplaces would need to increase by an estimated 19 percent for insurers to compensate for lost funding if they don’t receive federal payment for ACA cost-sharing subsidies….Among 12.2 million people who selected a 2017 ACA marketplace plan, about 58 percent, or 7.1 million, are receiving cost-sharing reductions.”​