State insurance regulators from across the country are imploring Congress to include Obamacare payments in a spending bill to fund the government next week.
The states say if the government doesn’t fully fund cost-sharing reduction payments to insurers to reimburse them for lowering costs for poor Obamacare customers, it could cause the individual market to collapse. The letter comes a day after the insurance industry unsuccessfully tried to get a top Trump administration official to commit to the payments.
The letter to congressional leaders of both parties calls for 2017 payments to be included in the continuing resolution that must be passed by April 28 to fund the federal government. It also calls for a commitment to fully fund the program in 2018.
State regulators are worried that without such a commitment now, more insurers could leave the individual market, which is for people who don’t get insurance through their job and includes Obamacare’s marketplaces.
“The time to act is now,” the letter from the National Association of Insurance Commissioners said. “Carriers are currently developing their rates for 2018 and making the decision whether to participate on the exchanges or even off the exchanges in 2018.”
The group of state insurance commissioners, who oversee the individual market in concert with the federal government, said the payments could go a long way “toward stabilizing the individual markets in our states while legislative replacement and reform options are debated in Congress.”
Insurers are required to reduce copays and deductibles for low-income Obamacare enrollees, and the government reimburses them. Insurers still have to lower the copays or deductibles even if they aren’t paid by the federal government.
Not paying insurers could force them to starkly raise premiums or leave the individual market altogether, the letter said.
The House sued the Obama administration over the payments, calling them illegal because Congress didn’t appropriate them. A federal judge agreed with the House, and the Obama administration appealed the decision.
However, it is not clear if the Trump administration is going to continue the appeal or drop the lawsuit. A status report is due May 22.
The state regulators are the latest group to issue a dire warning to Congress.
The insurance industry group America’s Health Insurance Plans met with Seema Verma, the new head of Centers for Medicare and Medicaid Services, on Tuesday. AHIP said the payments were discussed but no agreement was made to continue the payments.
President Trump has said he could withhold the payments to get Democrats on board with repealing Obamacare.
