Trump administration health officials push for cheaper off-exchange health care plans for middle-income Americans

By Emma Colton

The Centers for Medicare and Medicaid Services (CMS) encouraged states to let insurers sell individual plans without surcharges off the exchange to help Americans who do not qualify for subsidized health plans.

The Trump administration stopped paying certain subsidies to insurance companies in October 2017. Now, the administration is asking insurers to make small tweaks to off-exchange health plans to get around federal rules that require identical health plans to have identical premiums, whether they are on or off the exchange.

Americans who buy health plans directly from insurers or brokers, not from the Obamacare-created exchange, would have lower costs if insurers follow the CMS memo and drop surcharges.

The Trump administration stopped paying out cost-sharing reduction (CSR) subsidies to insurance companies in 2017. The CSRs were a product of former President Barack Obama’s Affordable Care Act.

Ending CSRs meant that many states let insurers add “premium surcharges” to individual plans so that they did not lose money, reported Kaiser Health News. Five states let insurers spread the surcharges between all their policies, but the majority adopted a policy called “silver loading” in which only silver plan premiums were hiked, raising their price tags about 10 percent.

The silver plans’ costs were hiked because those plans are the minimum level of coverage that individuals must buy to qualify for subsidies. Subsidized individuals did not feel the effects of the surcharge. However, people who make more than approximately $48,000 for one person or $100,000 for a four-person household are not subsidized and face rising premiums, reported Kaiser Health News.

The cost differences for subsidized versus non-subsidized health plan enrollees can be hundreds of dollars. Subsidized enrollees who bought health plans on the exchange during the 2018 open-enrollment period paid an average monthly premium of $89, reported Kaiser Health News. Non-subsidized enrollees owed $522 for a monthly premium, up 28 percent from $407 in 2017.

Some states had already adopted policies like the ones recommended in the CMS memo. California requires insurers to sell versions of plans with surcharges off of the exchange with lower premiums, according to Kaiser Health News.

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Image courtesy of Wikimedia Commons/Cukierspace