The same day the Colorado Division of Insurance issued a statement censuring President Donald Trump’s executive order to expand the use of association and short-term health insurance plans, it learned the administration would be discontinuing Cost-Sharing Reductions for the individual health insurance market.
CSRs fund discounts on deductibles, copayments and coinsurance for those eligible to receive them.
“In the Health Insurance Marketplace, cost-sharing reductions are often called ‘extra savings,’ according to healthcare.gov. “If you qualify, you must enroll in a plan in the Silver category to get the extra savings.”
The division’s response, in part, read:
… This is unfortunate, but the Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), was prepared for this and is putting its Plan B into place.
For low-income people who make too much to qualify for Medicaid, up to 250 percent of the Federal Poverty Level, CSRs are payments from the Federal government to help this group of people lower their out-of-pocket costs. … For months now, the president has hinted that he would discontinue these payments. Because of those threats, this past summer the DOI had Colorado health insurance companies submit two sets of rates for their 2018 plans, one that assumed the CSRs would continue to be funded, and another set that were based on the CSRs not being funded. The information on premiums that the Division released in September used the CSR-funded rates.
Now that the Trump administration is purposefully making people pay more for their health insurance, the DOI will move to the non-CSR-funded rates. These rates have already been reviewed by the DOI, and today the division is pushing the new premiums to Connect for Health Colorado so they can be loaded into its system. The Division’s plan is that open enrollment will continue as scheduled, Nov. 1-Jan. 12.
“As the Governor said in his statement, cutting the CSRs is cruel and irresponsible,” said Marguerite Salazar, Colorado Insurance Commissioner. “It doesn’t help people and will actually hurt consumers. However we knew this could happen and we were prepared with a contingency plan. The Division of Insurance is proceeding to ensure the health of Colorado’s individual market and protect Colorado consumers.”
The overall average increase that the non-CSR-funded rates will add to the 2018 premiums will be 6 percent. All of the companies that submitted CSR-funded rates for 2018 submitted non-CSR-funded rates, so while premiums will change, the insurance companies will remain the same as announced in September.
“We look to Congress to work together through the Alexander-Murray bipartisan Senate hearings to stabilize the health insurance markets,” said Commissioner Salazar. “In the meantime, the Division of Insurance is already switching gears so open enrollment can still take place and Colorado consumers can enroll in health insurance for 2018.”
Connect for Health Colorado, the state’s health insurance exchange, also issued a statement.
The day after the White House announced that it would end payments to health insurance companies to cover Cost Share Reductions, Connect for Health Colorado CEO Kevin Patterson said the state’s health insurance Marketplace is ready to support continued enrollments and financial help to qualifying Colorado residents.
“While this news brings a disruption to the individual health insurance market on the eve of Open Enrollment, I want everyone to understand that Connect for Health Colorado remains ready to assist Coloradans who buy their own insurance.,” Patterson said. “With the rate increases that we see because of this decision, the assistance available to folks who buy coverage through us goes up. Many of our customers will see their net monthly premium cost go down next year by 20 percent, on average, below what they paid this year.
“We have been working with the state Division of Insurance in preparing for this contingency. We are moving forward with our stakeholders toward the planned November 1, 2017-January 12, 2018, Open Enrollment Period.
“I want to further reassure the 45,000 Connect for Health Colorado customers whose co-pays and deductibles are reduced by the Cost Share Reduction program that they will not see their costs go up. The brunt of the burden of Thursday’s action is borne by our health insurance company partners.”