It didn’t take long for the fallout to begin after House Speaker Paul Ryan yesterday said that the spending bill lawmakers are hammering out won’t include subsidies for health plans that participate in the ACA marketplace.
Such a move “would cause further market instability,” Anthem’s CEO Joseph R. Swedish said yesterday, according to the New York Times. He’s giving lawmakers until early June to make a final decision, one that keeps the subsidies. The company says it would be forced to either leave many of the state exchanges or raise premiums by as much as 20% if the subsidies stop. The subsidies amount to about $130 billion from now until 2026, according to the Congressional Budget Office.
Health plans say they need the money to help defray the costs of covering about six million older and sicker beneficiaries. Young invincibles haven’t been signing up in the numbers needed to keep the ACA viable.
Trump and Republican lawmakers say that’s one of the reasons that the ACA is collapsing but Anthem’s earnings report indicate that the collapse might have been avoided, the Times reports.
“By adding new customers and raising prices, Anthem said its overall profits reached $1 billion on higher revenue of about $22 billion, beating Wall Street expectations and sending its stock higher on Wednesday,” the newspaper reports. “Its shares closed at $179.03, an increase of 3.8 percent.” Anthem currently covers 1.1 million people in the ACA marketplaces, and another 500,000 Anthem beneficiaries buy individual insurance under the law.
The subsidies are called cost-sharing reductions (CSRs) because they reduce the amount patients pay out-of-pocket. CSRs have become a political football, with many Democrats threatening to vote against any spending bill that doesn’t include them. President Trump has threatened to withhold the subsidies in a bid to force Democrats to negotiate a law that will replace the ACA.
Swedish also wants lawmakers to end the tax on health insurance, and facilitate the creation of high-risk programs that would help health plans cover people with high medical care costs. Before the ACA, 35 states had such programs in place.
Meanwhile: tick, tock. Lawmakers are feverously hammering out an agreement on a spending bill (that right now doesn’t include the subsidies) to avoid a government shutdown at midnight tomorrow.
Source: New York Times