State plans for loss of subsidies

Covered California’s board fears health-care subsidies are headed for the federal government’s chopping block — and is taking action.

Obamacare in California logo - health exchangeThe board confirmed June 15 that insurers must submit a pair of rate proposals for 2018 — one with continued cost-sharing reductions and one without.

Covered California will require participating plans to offer a “separately rated, non-mirrored” silver plan off exchange that is nearly identical to the Obamacare operation’s current “patient-centered benefit design.”

In exchange, insurers will receive premium increases of about 17 percent.

Tax credits consumers receive under the Affordable Care Act are expected to offset the increases.

Covered California chief Peter Lee called the plan “the best-worst option.”

Administrators plan to only place rate increases caused by “the uncertainty” onto silver plans under the operation’s metal-tier system. (The federally funded credits are tied to the silver-level premiums.)

“While silver-level consumers will see an increase in the gross cost of their premiums, they will also see an increase in the amount of financial assistance they receive, leaving their net payment virtually the same,” the state Obamacare operation said.

Covered California described its moves as “insulating consumers from the higher premiums caused by a lack of direction at the federal level.” It decried “the absence of a clear and reliable policy” from the Trump administration.

Insurer participant Kaiser Permanente backed the plan in a letter to the board: “We believe it will preserve a stable health insurance market in California for 2018, and will increase the likelihood that health plans will continue to offer coverage through Covered California,” vice president Bill Wehrle wrote. “Regrettably, in absence of certainty regarding (cost-sharing reduction) program funding, it may be the only approach that does so.”

Cost-sharing reductions are available only to silver plan members when they seek care. President Trump has targeted the subsidies as a way of killing the Affordable Care Act, as he promised while campaigning.

Some health plans may not participate in 2018, Covered California admitted. “The plans could leave midway through the year or raise their rates.” So far, the state Obamacare operation has not seen an exodus experienced by some other states.

“In the face of federal uncertainty, Covered California is doing everything we can to stabilize the market and protect consumers,” said executive director Peter Lee. “Today’s action allows Covered California to give our plans clear direction and assurances for the coming year.

“There is no logic in the federal government not continuing the way it currently funds cost-sharing reductions,” Lee said. “Not only do they help low-income consumers afford health care, but they also save billions of dollars in federal taxpayer money.”

Covered California’s board also approved a $314 million budget for fiscal year 2017-2018 that contains no state funding.

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