Obamacare premiums in 2019 will be 6 percent higher because of actions by the Trump administration that many Democrats say amount to “sabotage” of the healthcare law, according to a new analysis.
Nationwide premiums for the 2019 coverage year are expected to either slightly decline or only go up by modest single digits. But premiums for all plans sold on Obamacare’s insurance exchanges are expected to be 6 percent higher next year because the Trump administration did not expand access to cheaper plans, according to the analysis released Thursday from the research firm Kaiser Family Foundation.
Obamacare has become a flashpoint in the 2018 midterm elections, as Democrats say Republicans are now working to undermine a law Congress couldn’t repeal. Democratic leaders have reacted to news of lower Obamacare premiums by saying the decline would be even larger if the Trump administration supported the law.
Reasons for the 6 percent bump include the repeal of the individual mandate’s financial penalty in 2019. Another cause is regulations from Trump to expand the duration of short-term plans and boost access to association health plans, which allow a groups and individuals to band together to buy insurance.
Both plans are cheaper than plans sold on Obamacare’s insurance exchanges because they cover fewer benefits and don’t have to cover people with pre-existing conditions.
“Repealing the mandate penalty and expanding the availability of short-term plans and association health plans effectively siphons healthy people from the [Obamacare] marketplaces, driving up premiums as insurers’ risk pools include a larger share of sick people relative to healthier ones,” Kaiser’s analysis said.
Kaiser also noted the Trump administration’s decision last year to end payments to insurers called cost-sharing reduction payments. The payments reimbursed insurers for lowering out-of-pocket costs for low-income Obamacare customers. Trump said last October they were subsidizing Obamacare, so he halted them.
The loss of those payments led to higher premium increases on the Obamacare exchanges for 2018, and the 2019 coverage year will still feel the lasting effect of that change.
“The stripping of federal payments that insurers used under the ACA to lower the cost-sharing burden of some customers caused insurers to raise premiums to recover costs that they subsequently had to bear themselves, in many cases increasing premiums only for silver plans,” said Kaiser, referring to one of the metal tiers of Obamacare plans.
The silver plans are the most popular type of Obamacare plans sold on the exchange. The analysis found silver plans on the exchange would cost an average of 16 percent more because of the end of cost-sharing payments, the elimination of the mandate penalty, and the expansion of cheaper plans.
The Trump administration has said the short-term and association health plans act as another alternative for people who are priced out of Obamacare because they earn too much money to get a subsidy.
The analysis was based on an examination of proposed rate filings from insurers, including looking into the rationale that insurers use to justify charging a higher rate. Kaiser did not take into account the final rate as not all states have put together a final rate for their insurance exchange.
Obamacare plans are sold on the individual market, which is used by people who don’t get insurance through a job or the government.
Kaiser’s analysis is the latest to provide ammunition to Democrats’ claims that premiums would be even lower without Trump. The Brookings Institution released an analysis earlier this year that said premiums are going to be four percent higher because of the loss of the mandate and the new cheaper plans.
However, a separate July study from Brookings found that Obamacare stakeholders like insurers and advocacy groups believe the loss of the mandate penalty won’t be a major blow. The reason is the individual mandate penalty was very weak.
