Saturday, May 20, 2017

Beshear joins lawsuit to defend Obamacare cost-sharing subsidies; D.C. appeals court to consider request Monday

By Melissa Patrick
Kentucky Health News

Kentucky Attorney General Andy Beshear and 15 of his counterparts have filed a motion aimed at maintaining cost-sharing subsidies for health insurance for low-income people under the Patient Protection and Affordable Care Act. The attorneys general want a federal court to let them directly defend the subsidies, about which the Trump administration has been ambivalent.

In 2014, House Republicans sued the Obama administration over the legality of these cost-sharing subsidies being paid to insurance companies because Congress never appropriated the funding for them. A district court ruled in favor of the House, but the Obama administration appealed the ruling. The subsidies were allowed to continue pending the appeal.

When Obama left office, the Trump administration became the defendant in the lawsuit. The administration is scheduled to inform the U.S. Court of Appeals for the District of Columbia Circuit on Monday, May 22, how it wants to proceed with the appeal.

Harris Meyer of Modern Healthcare reports, "The state attorneys general claim their states' interests would be gravely harmed if the payments stop because many insurers would exit the individual insurance market, premiums would spike, many of their residents would be left uninsured, and state and local governments would face heavy costs in paying for medical care for the newly uninsured people."

Beshear said in a news release, “Thousands of Kentuckians who purchase health insurance from the federal exchange are at risk of losing access to affordable health care coverage. The loss of federal funds and the financial uncertainty threatened by the case would lead to higher health insurance costs for Kentuckians and to insurers abandoning the individual health insurance market.”

The Kaiser Family Foundation projects that without the cost-sharing subsidies, premiums would increase by an average of 19 percent on ACA "silver" plans, the most popular, and higher in states that have not expanded Medicaid. The subsidies are available to people with incomes between 100 and 250 percent of the federal poverty level -- between $24,300 and $60,750 for a family of four.

Kentucky has extended its deadline for filing 2018 Obamacare plans to June 7, from the original May 17, "to allow insurers more time to obtain relevant data, including enrollment and claims data for the beginning of 2017, for use in developing assumptions utilized by actuaries to determine necessary plan pricing," Ronda Sloan, spokeswoman for the state Department of Insurance, told Kentucky Health News in April.

During the 2017 open enrollment period, 81,155 Kentuckians enrolled for coverage through the exchange and four out of five of them received a subsidy to help pay for their premiums, according to the Kentucky Center for Economic Policy. 

Both the ACA and the House-passed health bill, called the American Health Care Act, include subsidies, but use different formulas. The ACA takes family income, local cost of insurance and age into account, while the AHCA bases its tax credit only on age, with a phase-out for individuals with incomes above $75,000. It would continue the cost-sharing subsidies until 2020, "but would not appropriate those funds, leaving insurers uncertain whether they would receive the payments," Modern Healthcare reports.

Subsidies to low-income consumers who sign up for insurance on the exchange are estimated at $7 billion this year, according to the Congressional Budget Office.

Politico reports that Trump has told his advisers that he wants to end the Obamacare subsidies to force Democrats to the table to negotiate an Obamacare replacement.

The states seeking to intervene in the case are California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Mexico, New York, Pennsylvania, Vermont and Washington, as well as the District of Columbia.

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