Senate Democrats: Health Insurance Costs Are Rising Across The Country Because Of The Trump Administration And Congressional Republicans

August 3, 2018

As Proposed 2019 Rates Are Published In Every State, Insurers And State Insurance Commissioners Are Blaming The Actions Of Trump Administration And Republican Congress For Higher Rates

Insurers Say Higher Rates Due To Repeal Of Health Insurance Coverage Requirement, Promoting Junk Insurance, Cutting Enrollment Outreach, And More 

Senate Dems To Trump And GOP: Stop The Sabotage And Work With Us To Lower Health Care Costs And Protect Pre-Existing Condition Protections

Washington, D.C.—Today, Senate Democrats marked the publishing of proposed health insurance rates for 2019 marketplace plans in all 50 states, noting that American families will be paying more thanks to the politically-motivated actions of President Trump, his administration, and Congressional Republicans. Health care experts, from patient groups to doctors, insurance commissioners to hospital groups, have spoken out against the sabotage and placed blame on their actions for rate increases.

“From day one of his administration, President Trump has embarked upon a politically-motivated mission to undermine our health care system, paying no mind to hurting families along the way,” said Senate Democratic Leader Chuck Schumer (D-NY). “Undeterred by a bipartisan rejection of the Senate health care repeal bill last July, Senate Republicans jammed through a repeal of the health insurance requirement in their tax bill to help pay for their giveaway to the wealthiest few. And seemingly day after day, the Trump administration finds a new way to administratively undermine our health care system, whether it is through expansion of junk insurance or putting insurance companies back in charge of writing insurance rules. Today, we see the consequences: American families paying more than they need to for health insurance in every state in the nation.”

“The evidence and experts have been clear, there is absolutely no question that families across the country are facing higher costs because President Trump has sabotaged their health care,” said Senate Committee on HELP Ranking Member Patty Murray (D-WA). “Families have seen their premiums rise and the care they need become harder to get because of President Trump’s efforts to undermine their care and weaken patient protections, including those for people with pre-existing conditions. Democrats are going to keep urging Republicans to stop the sabotage and instead work with us to lower costs for families—we’re at the table whenever they are ready to get to work.”

“The president has made some big-time promises when it comes to health care – but now the results are in and it’s clear he has only delivered higher premiums for families and junk ‘health insurance’ that won’t cover Americans’ pre-existing conditions,” said Senate Committee on Finance Ranking Member Ron Wyden (D-OR). “Last year, when the dog caught the car and Republicans gained control of all the levers of power in Washington, the only legislative plan they could come up with threw millions off their health care and raised premiums for everybody else. Now, instead of moving in the other direction and working together to make health care better, it appears the only plan Republicans can agree on is a backdoor sabotage crusade that sends health care markets into a death spiral and throws open the door to worthless junk plans.”

Read more about ten of the major actions taken by the Trump administration and Republican Congress to increase costs and decrease access to quality coverage here.

Health insurers, state insurance commissioners, and other insurance experts across the country have blamed higher rates on the actions coming from the Trump administration and Congressional Republicans. Insurance experts have blamed the repeal of the health coverage requirement in the Republican tax bill, overall sabotage of our health care system, and general instability for the increase—or lack of decrease—in average health insurance premiums.

Health Coverage Requirement Repeal

Kaiser Permanente: “These proposed rates reflect the expected costs of providing coverage for these members, including the impact of eliminating the individual mandate penalty.” [Baltimore Sun, 5/7/18]

Regence BlueCross BlueShield of Oregon: “Several insurers listed the repeal of the individual mandate penalty as a contributing factor to their increases. Regence said in its filing that the individual market will ‘contract due to the weakening of the federal mandate to have health insurance.’” [Washington Examiner, 5/15/18]

Keith Forrester, Kaiser Permanente: “‘Our rate increase reflects the expected costs of providing coverage for our members, including the impact of eliminating the individual mandate,’ said Keith Forrester, a Kaiser vice president.” [Portland Tribune, 5/15/18]

Blue Cross Blue Shield Vermont: “But insurers also are factoring in an anticipated loss of customers due to the fact that, starting in January, the federal government no longer will penalize those who don’t have insurance. ‘As a result, it is expected that a number of healthy individuals will choose to forgo coverage and leave the single risk pool,’ Blue Cross’ rate filing says. ‘This is expected to exert an upward pressure of 2.2 percent on premium rates.’”  [Valley News, 5/17/18]

Molina Healthcare of Washington: “An adjustment was applied to the experience period to reflect the anticipated change in morbidity of the market-wide risk pool due to the repeal of the individual mandate. The Washington Marketplace is expected to decrease in size and have a higher average morbidity compared to the experience period.” Rate Filing, 5/18/18]

Eric Linzer, President of the Health Plan Association: “Eric Linzer, president of the Health Plan Association, which represents insurers, defended the requests. ‘The proposed premium rate requests are reasonable, reflecting the cost of care and taking into account a number of factors contributing to rising health care costs,’ Linzer said, citing, among other things, the loss of the individual mandate and rising drug and hospital costs.” [New York Daily News, 6/4/18]

CareSource Kentucky: “Additionally, the removal of the individual mandate will increase the overall health risk of the Kentucky marketplace due to plan selection bias. Consumers with the greatest need for health insurance will tend to maintain coverage while healthier consumers may forgoe coverage. Therefore CareSource will require an increase in premiums in order cover the expected increase in claims costs.” [Rate Filing, accessed 7/19/18]

Maine Community Health Options: “In 2019, the individual mandate will no longer be in effect. We expect an additional worsening in overall marketplace morbidity from 2018 to 2019 as a result of the repealed mandate. We estimated the impact of this change would require a 5% increase over the 2018 experience. This estimate is consistent with the estimated 4% - 10% released by the Congressional Budget Office (CBO). Additional marketplace disruption is expected in 2019 as a result of the introduction of short term limited duration (STLD) policies and the proposed rules related to association health plans (AHPs). We estimate an additional increase of 5% to 2018 experience would be needed for 2019.” [Rate Filing, accessed 7/19/18]

Leslie Moran, Senior Vice President with New York Health Plan Association: “‘Without the penalty, some people who won't have coverage will no longer purchase coverage. So when you take the younger, healthier people out, your pool is smaller, you can't spread the cost as wide of a population, so everyone ends up paying a little bit more,’ said Moran.” [WROC-TV, 6/5/18]

Pam MacEwan, Washington Health Benefit Exchange CEO: “Washington Health Benefit Exchange CEO Pam MacEwan said in a statement that instability in the individual market was responsible for another year of premium increases. ‘The plan filings do reflect an ongoing trend of market volatility that places unnecessary financial stress on Washington residents. The instability is due in large part to the unknown effects of actions, including the removal of the individual mandate and other changes, made at the federal level,’ she said.” [Spokesman Review, 6/7/18]

Blue Cross Blue Shield of Michigan: “In relation to the insurance risk pool specifically, the repeal of the ACA’s Individual Mandate for 2019 may significantly impact premiums in years ahead due to an anticipated decline of younger, healthier people enrolling on the Marketplace. In fact, the CBO estimates 13 million fewer Americans will be insured by 2027.” [Press Release, 6/15/18]

Maria Vullo, Superintendent of the New York Department of Financial Services: “With respect to the individual market, the single biggest justification offered by insurers for the requested increases is the Trump Administration’s repeal of the individual mandate penalty.  The individual mandate, a key component of the Affordable Care Act, helped mitigate against dramatic price increases by ensuring healthier insurance pools.  Insurers have attributed approximately half of their requested rate increases to the risks they see resulting from its repeal.  Without the federal action, the average requested rate increase would be 12.1%.” [Press Release, 6/1/18]

Overall Sabotage (Promoting Junk Insurance, Repealing Coverage Requirement, Eliminating Cost-Sharing Reduction Payments, Cutting Enrollment Outreach)

Cigna Health and Life Insurance Company, Florida: “The most significant factors requiring the rate increase [include] … elimination of the Individual Mandate penalties [and] anticipated changes to regulations regarding Short Term Medical and Association Health Plans that will impact the Affordable Care Act risk pool.” [Rate Filing, accessed 7/19/18]

Matt Eyles, AHIP Senior Executive Vice President: “‘When you think about things like the individual mandate going away, some of the other proposed rules that are being put in place, whether it be around association plans, short-term policies, it’s just still a nasty soup right now that’s brewing and we’re looking ahead to 2019 and it’s not a really great picture right now,’ he said. He noted that ‘a lot of companies are committed to the market’ but indicated they might need to raise premiums to deal with the instability.” [The Hill, 4/9/18]

Steve Smitherman, President of Indiana Market for CareSource: “’Some consumers may see a slight increase in rates due to the elimination of the Affordable Care Act's individual mandate penalty and the expansion of short-term health plans and association health plans, which tend to pull out young, healthy populations from the Marketplace and drive increases in medical costs and rates,’ Steve Smitherman, president of the Indiana market for CareSource, said in an email.” [Journal Gazette, 6/22/18]

Providence Health Plan: “Providence Health Plan, which is seeking a 13.6 percent rate hike, also cited the mandate repeal and the Trump administration’s pursuit of cheaper, low-quality health plans.” [Washington Examiner, 5/15/18]

Kris Haltmeyer, Blue Cross Blue Shield Association: “Kris Haltmeyer, a vice president at the Blue Cross Blue Shield Association, told reporters that the premium increases were in part due to the repeal of ObamaCare’s individual mandate in the Republican tax reform bill in December. He also cited lawmakers’ failure to pass a bill aimed at shoring up the market, which fell apart earlier this year amid a partisan dispute over abortion restrictions. ‘With the repeal of the individual mandate and the failure of Congress to enact stabilization legislation, we are expecting premiums to go up substantially,’ Haltmeyer said. He estimated that average premium increases nationwide will be in the ‘low teens,’ but that there will be major variation across areas, ranging from the low single digits to up to 70 or 80 percent. Haltmeyer said the premium increases are ‘related to the loss of the mandate and then underlying medical costs.’ ‘Those two things have the most impact on the rate increases,’ he added. … Haltmeyer said another factor driving premium increases is the Trump administration’s move to expand short-term plans that do not meet ObamaCare requirements. Like repeal of the mandate, insurers warn that change will siphon off healthy people and raise premiums for those remaining in ObamaCare plans.” [The Hill, 5/23/18]

Office of Rhode Island Insurance Commissioner: “This year’s rate filings are made against the backdrop of continuing uncertainty over federal policy actions around the Affordable Care Act, such as the discontinuance of both Cost Sharing Reduction subsidies and penalties for not having insurance. The federal policy changes could disrupt insurance rates and markets nationwide.” [Office of the RI Insurance Commissioner, 5/31/18]

Ed Kane, Vice President of Harvard Pilgrim Health Care: “Kane said the biggest threat to the stability of Maine’s ACA market in 2019 actually pertains to small group health plans. He has repeatedly expressed concerns about the introduction of ‘self-insured’ plans that he says are structured to skirt ACA requirements and undercut the market. ‘One development which threatens the stability of the small group market that the ACA is intended to protect and enhance is the advent of so-called self-insured products in the small group market, the success of which is ultimately at the expense of ACA participants,’ Kane said.” [Portland Press Herald, 5/28/18]

Regence Blue Cross Blue Shield: “These rate changes are necessary due to the increasing cost of medical care, the continued lack of funding for cost sharing reduction plans, and the expected reduction in the size of the Individual ACA market, which are partially offset by the moratorium on insurer fees. This filing reflects projected claims expenses increasing by approximately 8% annually.” [Rate filing, 6/7/18]

Mary Danielson, BlueCross Spokesperson: “BlueCross spokeswoman Mary Danielson says the rate reduction would have been larger if the federal government hadn't suspended certain Obamacare payments.” [AP via US News & World Report, 7/12/18]

Hometown Health Providers insurance Company: “Three separate morbidity adjustments were applied to the experience period claims to reflect the population anticipated to be insured in Hometown’s individual PPO product in 2019. These adjustments [include]: Elimination of the individual mandate penalty, Expansion of association health plans.” [Rate Filing, accessed 7/19/18]

CHRISTUS Health Plan: “Due to the uncertainty about the market environment that will exist at the time the proposed rates take effect, the rates include a 6% additional adjustment from 2018, for less tangible items, including non-enforcement of the individual mandate and reduced advertising and outreach.” [Rate Filing, 6/5/18]

Office of the Pennsylvania Insurance Commissioner: “The individual and small group insurance markets have been subject to intense and deliberate sabotage by the federal government in the past year, including: the elimination of cost-sharing reductions, shortening of the open enrollment period, slashed federal funding for outreach to consumers, the elimination of the individual mandate, and the continual threat of the repeal of the ACA, which has created instability and uncertainty for insurers and consumers.” [Press Release, 6/5/18]

Mike Kreidler, Washington Insurance Commissioner: ““There’s still a great deal of uncertainty in individual markets across the country, fueled by the Trump administration’s efforts to undermine the Affordable Care Act. Instead of getting behind solutions that shore up these markets, the administration seems solely focused on undermining our health insurance system and the individuals and families who need to buy their coverage in the individual market. If the administration was serious about providing relief to consumers, it would abandon its proposals to segment the market with association health plans and short-term, limited-duration medical plans and work with Congress to pass market stabilization legislation and find solutions to the rising costs of health care and prescription drugs.”” [Press Release, 6/4/18]

General Instability

Steve Smitherman, President of Indiana Market for CareSource: “[Smitherman] said repeated attempts by the Trump administration to repeal the ACA have created an unstable environment that makes it difficult for insurers to commit to staying in the market. ‘Efforts to undermine the ACA have directly driven annual premium increases that have priced the desired healthcare coverage out of reach for many consumers,’ Smitherman wrote.” [Indianapolis Star, 6/22/18]

Kaiser Health News: “The impact of changes to the law made by Republicans over the past year — modifications short of the ‘repeal and replace’ they promised — is becoming clear. Initial announcements show health insurers in several states are seeking big increases in premiums for next year for people who buy their own insurance.” [Kaiser Health News, 5/11/18]

Ray Farmer, South Carolina Department of Insurance Director: “Department of Insurance Director Ray Farmer said all the uncertainty swirling around the ‘repeal and replace’ debate in Congress makes it difficult for insurance companies to price these policies. ‘We had a significant increase last year,’ he said.“ [Post and Courier, 5/19/18]

Chet Burrell, Chief Executive of CareFirst: “Continuing actions on the part of the administration to systematically undermine the market and make it almost impossible to carry out the mission,” Burrell said. “If continued efforts at the federal level undermine the marketplaces, I would think the board would have to examine what they would want — that’s very much on their mind.” [Washington Post, 5/1/18]

Chet Burrell, Chief Executive of CareFirst: “‘There’s been a series of actions taken by the current administration that have undermined enrollment,’ said Chet Burrell, president and CEO of CareFirst.” [The Hill, 5/7/18]

Doug Gray, Executive Director of Virginia Association of Health Plans: “There are a variety of factors feeding the rising costs, said Doug Gray, the executive director of the Virginia Association of Health Plans. The most immediate is that the administration under President Donald Trump cut cost-sharing reduction payments after Congress failed to repeal the Affordable Care Act, often called Obamacare. Insurers are required to offer cost reductions to low-income members by law, and raised their rates once the federal government stopped paying them.” [Richmond Times-Dispatch, 5/10/18]

Ken Janda, CEO of Community Health Choice, Inc: “Ken Janda, CEO of the insurance company, said the requests for 2018 are probably even more subject to change. The ongoing turmoil in Washington, he said, has made it extraordinarily difficult for companies like his to calculate risk and set rates because insurers do not how many will sign up for coverage or more importantly, how sick they will be.” [Houston Chronicle, 6/1/18]

Katharine Wade, Connecticut Insurance Commissioner: “‘Of concern, however, is the ongoing uncertainty in Washington that threatens to destabilize the health insurance markets, particularly for individuals,’ Wade said. ‘The department is pressing for clarity and guidance from the federal government so that we can finalize the rates for 2019.’” [Healthcare Finance News, 7/23/18]