NASW closely monitoring President Trump’s actions to undermine health security for Americans

Oct 17, 2017

Last week, President Trump took steps to further undermine the health security of millions of Americans by ending a critical cost sharing program for low income individuals and removing vital consumer protections on the sale of health insurance. While few observers of the health care debate are surprised by the President’s actions, most are nonetheless outraged that he went forward with this clear attempt to his executive powers to rescind ACA. A broad coalition of states, insurers, providers, and advocacy groups, who had encouraged the Administration to continue Cost Sharing Reduction (CSR) payments, has expressed strong opposition to the President’s actions.

As a reminder, under the ACA, nearly six million low- and moderate-income people are eligible to receive CSR subsidies, which lower their deductibles and other health care costs. The federal government directly reimburses insurers for those costs. The Congressional Budget Office (CBO) estimates the CSR reimbursements come to nearly $7 billion a year. Individual eligibility to qualify for CSR subsidies requires a single adult have yearly income no more than 250 percent of the poverty line. For a family of four, this translates to earning up to $60,000 a year. Under the existing CSR program, most eligible individuals can save close to $1,100 of out-of-pocket costs annually.
According to analysis, President Trump’s executive order expects to yield the following results:
• Insurance companies who participate in ACA exchanges will anticipate losing significant revenues due to loss of CSR payments and will likely end participation in the marketplace;
• There will be an almost immediate increase of uninsured. This is based on a Congressional Budget Office estimate that ending the CSR payments will raise the number of uninsured people by 1 million in 2018;
• Those most directly impacted will be:

o Low-to-moderate income individuals and families in the exchanges will see premiums rise dramatically – those enrolled in silver plans can expect to see a premium increase of 19% or more.
o Individuals and families that have incomes at 100-138% of poverty are unlikely to be impacted, as this population enjoys guaranteed coverage either through subsidies or through Medicaid expansion.

NASW will closely monitor these actions, and will issue action alerts to members as this situation evolves. Please stay tuned.

In addition to halting CSR payments, the Administration’s Executive Order – Promoting Healthcare Choice and Competition Across the United States – paves the way for small businesses to offer ‘bare bones” health insurance to their employees. In essence, the Executive Order will allow small businesses to purchase short-term policies for their employees, but will not have to comply with ACA mandates to cover those with pre-existing conditions.

The obvious implications of the “small businesses” exemption from ACA standards is that these low-income and limited benefit health plans result in gaps of services such as pre-natal care, preventive health tests, behavioral health services, and coverage for very expensive chronic ailments, such as, cancer and heart disease. Perhaps more problematic is the fact that younger participants will flock to the cheaper plans, while older individuals- who have serious health conditions- will be confronted with much higher premiums because they cannot meet their medical needs through the “bare-bones” policies.

Despite these unilateral actions NASW and other organizations still have a critical part to play in fighting these executive orders. In fact, Trump’s decision is facing resistance from Democratic state attorneys general who argue that the Trump executive orders with severely compromise the protections in ACA designed to preserve essential subsidies. As of October 16th, 18 states and D.C. have signed onto a lawsuit to stop the decision. Because the CSR executive action actually has a greater negative impact of so-called Trump voters, it is not a stretch to believe that even some Republican states will join in opposition. It is also expected that some major insurance companies with take legal steps to prevent the executive order from being implemented.

NASW will closely monitor these actions, and will issue action alerts to members as this situation evolves. Please stay tuned.

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