Mario Molina, CEO of insurer Molina Healthcare, on Thursday, threatened to leave the Obamacare exchanges if federal payments to insurers aren’t funded.
“If the [subsidies are] not funded, we will have no choice but to send a notice of default informing the government that we are dropping our contracts for their failure to pay premiums and seek to withdraw from the marketplace immediately,” he wrote in a letter to Congress.
He said if that occurred, then 650,000 to 700,000 people would lose insurance coverage this year, and the company would not participate in the exchanges next year, which would result in 1 million people losing coverage.
Insurers are worried about losing the payments, called cost-sharing reduction subsidies, because of a lawsuit saying they were distributed illegally. That lawsuit began under the Obama administration and has now been delayed.
President Trump told the Washington Examiner that he would wait to make a decision about the payments until he knows what happens with the American Health Care Act, the bill Republicans are advancing to repeal portions of Obamacare.
Though the funds continue to be allocated, insurers are quickly approaching a deadline to file rates for next year, and those premiums will depend in large part on whether the money continues to flow from the government to insurers. They have said that the lack of a final decision creates greater uncertainty for their business, which factors in the $7 billion expected in subsidies this year and $10 billion next year.
America’s Health Insurance Plans, which represents insurers, released a statement Thursday asking for a commitment from the administration and Congress to fund the payments for at least two years. Other groups on that statement were the American Academy of Family Physicians, American Benefits Council, American Hospital Association, American Medical Association, Blue Cross Blue Shield Association, the Federation of American Hospitals and the U.S. Chamber of Commerce.
“Cost-sharing reductions are used solely to help those who need it most — low- and moderate-income consumers,” they wrote. “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.”
