Early retirees and certain self-employed individuals buying insurance on Affordable Care Act exchanges, particularly those managed federally, are hurting the most as they face increased premiums without benefiting from subsidies, including tax credits.
The cost of premiums has increased by an average of more than 30 percent nationwide, with some states seeing rises of close to 50 percent and even greater hikes in some counties.
Rep. Marsha Blackburn said the effects of the ACA have been "disastrous for so many families" in her home state of Tennessee.
"In particular, the individual mandate forced people to buy health care insurance they did not want, or could not afford," Blackburn told Patient Daily, adding that last year, 120,000 families in the state chose to pay the individual mandate instead of buying health care.
"Since the Affordable Care Act was signed into law, health care prices increased by 176 percent," Blackburn said. "Obamacare meant less health care insurance choice and at a much higher price."
Blackburn added, "I am thrilled that under the Tax Cuts and Jobs Act, the individual mandate will be overturned. I am committed to passing the Health Care Choices Act, which will allow consumers to buy health insurance across state lines.
"This will drive down health insurance costs by providing competition and choice and allowing the consumer to decide which health insurance plan best meets their family’s needs," Blackburn said. "It will also allow consumers to purchase health insurance the way they do any other insurance: online, by mail, by phone or by consultation with a health insurance agent in their hometown. This bill is about the consumer, not the health insurance companies.”
While a majority of people are eligible for premium tax credits that will largely offset those rises, individuals and families with income more than 400 percent of the poverty level and who buy insurance on the exchanges must pay out of pocket.
That catches individuals earning more than $48,240, couples with an income of $64,960 and a family of four taking home just over $98,000. Sole proprietors, freelancers and early retirees who have managed their money well and have income streams will be most affected.
Months of uncertainty over the cost-sharing reduction (CSR) payments and other provisions of the Affordable Care Act, led to insurance companies asking and receiving from state regulators large increases in premiums for the silver, or benchmark, plans.
CSR payments totaling approximately $7 billion in 2016 were given to insurance companies to keep premium costs down while the individual marketplace stabilized. After months of speculation, President Donald Trump announced in October his administration was discontinuing CSR payments.
"Federal uncertainty was the primary cause (of the premium increases)," Maanasa Kona, a research fellow at Georgetown University's Center on Health Insurance Reforms, told Patient Daily. "Whether the CSR was funded or not, actuaries were raising premiums."
Some states allowed insurance companies to adjust their rates after the discontinuation of CSR payments was announced, Kona said.
"People are facing higher premiums because of the Trump administration, the pulling of the CSR, taking funding away from promoting enrollment and opening up coverage options -- associations, short-term plans -- that are not ACA-compliant," she added.
These will draw even more healthy people from the individual marketplace going forward, Kona said.
And now with the repeal of the individual mandate, which is included in the Republican tax bill, it can now be said the Trump administration and Republican Congress will own what happens in the individual marketplace, Kevin Lucia, the center's senior research professor, told Patient Daily.
Lucia argued that the marketplace was stabilizing going into 2017 but that the policies and positions taken by the Trump administration have made a huge difference.
States that manage their own exchanges will have the room to be more agile and the ability to adapt better to the changed circumstances, Kona said.
This was a view echoed by her colleague, who said states will have "more on the ground authority to shape their markets." They may also introduce state-level individual mandates, Lucia said, as Maryland lawmakers recently proposed.
