White House to end Affordable Care Act state subsidies, affecting some in metro-east

For more than 5,000 metro-east residents covered by Affordable Care Act insurance plans with subsidies, costs may go up by 14 percent next year.

The White House informed a federal appeals court Friday that it plans to immediately end the state subsidies that were key to the ACA, helping to offset the costs of some ACA insurance plans in states that accepted the funds, including Illinois.

The next payment to insurers was scheduled for Oct. 18, and is now canceled. The America’s Health Insurance Plans and Blue Cross Blue Shield Association, which are the two main trade groups from the health insurance industry, gave what the Washington Post called a “rare joint statement” calling the subsidies critical and warned that eliminating them would raise costs and reduce choices in the health care marketplace. CNN reports that the insurers may sue for the payments they are owed for the last two months of this year as well.

In St. Clair County, 5,225 people are covered by ACA plans, of which 2,498 are partially subsidized at an average of $1,069 per person. In Madison County, 5,871 are covered, of which 2,614 are partial subsidized at $1,048 per person.

The subsidies are offered to allow people with incomes ranging up to 2.5 times the poverty level to buy health insurance.

The Kaiser Family Foundation crunched the numbers back in April, and found that if the states were to lose the federal subsidies for ACA health insurance plans, premiums would go up by 19 percent nationally. Approximately 58 percent of the 12.2 million people covered by ACA plans receive the cost-sharing reductions.

According to an analysis by CNN Money, people who qualify for premium subsidies will see some increases in their premiums. But middle-class Americans who earn too much for the subsidies will see much bigger increases.

An earlier Kaiser study determined that the subsidies lower combined medical and prescription deductibles by as much as $3,354, and reduce out-of-pocket costs by $5,587.

In Illinois, the estimated premium increase would be 14 percent. In Missouri, it would be 18 percent. The highest increase would be in Mississippi, with a potential 27 percent increase.

Attorneys general in 18 states have pledged to challenge the White House decision in federal court. Among them is Illinois, as Attorney General Lisa Madigan announced late Friday.

“Ripping healthcare coverage away from millions of people who need it most is not just illegal but unjust,” Madigan said. “I will keep fighting this reckless action to ensure Illinois residents receive the healthcare federal law provides.”

The Congressional Budget Office estimates the cost of the ACA subsidies at $7 billion in this fiscal year, and that with the rise in uninsured, the federal deficit would increase by $194 billion.

National reaction to the White House announcement has been strong. GovExec.com, a trade magazine for federal workers, reported that Congressional Democrats are considering a government shutdown to prevent the subsidy funding cutoff, while the White House has threatened a shutdown if Congress does not approve $1.6 billion funding to begin building the wall between the U.S. and Mexico.

Blue Cross Blue Shield of Illinois, the state’s largest insurer, has vowed to remain in the ACA exchange next year, according to the Chicago Tribune. Health Alliance Medical Plans, which is mostly focused on central and Southern Illinois, has not made a decision, and Cigna and Celtic did not immediately reply to the Tribune.

In September, the Department of Health and Human Services informed the grassroots groups that assist with ACA enrollment that funding for signing people up for plans would be reduced by 92 percent. The advertising budget to inform people of the ACA enrollment period was cut from $100 million to $10 million. Open enrollment runs Nov. 1 to Dec. 15.

This story was originally published October 13, 2017 at 4:52 PM with the headline "White House to end Affordable Care Act state subsidies, affecting some in metro-east."