President Trump is rarely right about much, but he was correct earlier this year when he observed that health care is complicated and that fixing it is hard. Sadly and ironically, however, these difficult truths are now conspiring to confuse some observers as they try to report on Trump’s recent efforts to sabotage the Affordable Care Act and the rate hikes they have spurred for consumers.
For an especially maddening case in point, see the recent developments in North Carolina.
Last week, the state’s largest provider of health insurance, Blue Cross Blue Shield of North Carolina, announced that it would raise its premiums by an average of 14.1 percent for individual market plans in 2018. The obvious and direct impetus for the rate hike was President Trump’s decision to end the federal government’s “cost-sharing reduction” payments (CSR’s) to insurers that helped subsidize the premiums of lower-income participants in the Affordable Care Act.
Unfortunately, due to the timing of the announcements by Trump and Blue Cross Blue Shield and some confusing language in a press release from the insurer, some news reports have mistakenly reported that the two events are somehow unrelated. Indeed, the headline accompanying a story from Associated Press in some newspapers read “NC’s Blue Cross: Trump’s Obamacare Move No Impact on Rates.”
This was blatantly inaccurate and misleading.
Unfortunately, what appears to have happened is that some reporters misread a Blue Cross Blue Shield press release from last week which stated that the latest Trump announcement would not impact the 14.1% rate hike already planned.
But that was only because the insurer had already anticipated the Trump action!
In other words, though it was announced in August, the Blue Cross Blue Shield rate hike was and is directly attributable to Trump sabotage. At the time, the company actually sought a 22.9% rate hike. Here’s what it said at the time:
“We believe the individual ACA market will contract in 2017and 2018, and that this will have a deteriorating effect on the overall market risk. We believe this is the result of:
- The elimination of Federal funding of CSR payments, which will significantly increase rates for many members that do not receive APTC premium subsidies. This will drive many healthier individuals to exit the market.
- Consistent messaging from Federal policymakers stating their intent to abolish the ACA coverage mandates. We believe this will embolden many healthier individuals to drop coverage, no longer fearing enforcement of the mandate policy.”
Later, Blue Cross Blue Shield announced that it was reducing its requested rate increase to 14.1 percent due to better claims data. In other words, because their members’ risk profile and their company financial performance had improved throughout 2017, the primary (and sole) driver of their rate increase request for 2018 would be lack of funding for CSRs, which was responsible for the same amount (14.1 percent) in their initial request.
The company has made that clear for a long time and even noted in once more last week in a press release:
“…ending these federal reimbursements will drive up premium costs and make it harder for insurers to participate in the ACA marketplace in the long run. Had [Cost-Sharing Reduction] payments not been eliminated, Blue Cross NC’s final rate request for ACA customers’ average would have been near zero; however, most customers receiving premium assistance will see that assistance rise in 2018 to offset the higher increase that was needed.” (Emphasis supplied.)
And so we know that while earlier efforts to undermine enrollment—shortening the Open Enrollment period to only six weeks, cutting funding for outreach and enrollment assistance, using taxpayer dollars to create anti-ACA videos, etc.—helped to destabilized the insurance markets in many ways, it was Trump’s decision to end the cost-sharing payments that is directly driving Blue Cross Blue Shield to increase its premiums by double digits.
Simply put: North Carolinians will face higher prices for their health care in 2018, and they have no one to blame but the Trump administration.
Happily, despite the Trump administration’s destructive efforts to undermine enrollment and raise costs, most North Carolinians still qualify for financial assistance and can find affordable health insurance options. Every consumer should shop around on www.HealthCare.gov  for better plans and prices during the shortened Open Enrollment period that will run from November 1 to December 15 this year. Free in-person enrollment assistance is available at www.NCNavigator.net and 1-855-733-3711.
Brendan Riley is a Policy Analyst at the North Carolina Justice Center’s Health Advocacy Project .