Trump Ends Health Care Subsidies: Who Will Be Affected?

Oct 14, 2017
Originally published on October 17, 2017 9:41 am
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MICHEL MARTIN, HOST:

We're going to dig in a little deeper on these big policy changes that the Trump administration is trying to make to the Affordable Care Act. And we're going to talk about what it could mean to the millions of Americans who signed up for health insurance because of it. We're particularly interested in people who are likely to be hit with steep insurance premium rises. And we're joined now by Julie Rovner, who's been covering this for Kaiser Health News. Julie, thanks so much for joining us once again.

JULIE ROVNER: My pleasure.

MARTIN: So, first, could you take a step back and remind us who got health insurance in the first place because of the ACA? Who are the newly insured? And how many people are we talking about?

ROVNER: Well, we're talking about 20 million people total. Many of them got insured through expanded Medicaid which most of the states have now done, but another several million were able to buy insurance for the first time partly because they had been shut out before because they may have had pre-existing conditions and insurers simply wouldn't sell them insurance or because they were getting help paying their premiums, which the Affordable Care Act offered. So people who might not have been too sick to get insurance but still couldn't afford it could now afford it.

MARTIN: And walk us through what happened this past week and who is most likely to be affected.

ROVNER: So the president did two different things. First, he did this executive order which didn't actually change anything. It just ordered the relevant agencies - and that would be the Department of Health and Human Services and Labor and Treasury - to put out regulations to basically see if they could make less comprehensive, lower cost coverage more available.

Then late Thursday night, the President did something that does happen immediately. He said that he would stop paying these cost sharing subsidies. It's about $7 billion for lower-income people - people under 250 percent of poverty, about $30,000 for an individual. Those people were getting extra help not just paying their premiums but paying their out-of-pocket costs - these, you know, multi-thousand dollar deductibles and co-payments and co-insurance. Interestingly though, those subsidies aren't going to stop. They're required under the law. Insurers are required to provide it to those people. So the question is, what becomes of that money that the insurers are now getting?

MARTIN: Yes, so what does become of that?

ROVNER: So the insurers have a couple of options. One of them is to raise rates, and a lot of them have done that. And a lot of them did that already with the anticipation that the president might stop making these payments. One of them is to leave the market entirely, which we're now seeing some insurers thinking about doing. And the third one is to just eat the increased costs, which we assume none of the insurance companies are going to do.

But the people who are going to get hit the hardest are the people who don't get help paying their premiums because they're going to load this money that they're not getting anymore onto the premiums. And we're looking at people who make not a ton of money, 400 percent of poverty is about $64,000 for a couple. Those people may be asked to suddenly pay tens of thousands of dollars more.

MARTIN: Do we have a sense of who these people are?

ROVNER: So who these people are - they tend to be older because they have higher premiums. They may be early retirees who are not yet eligible for Medicare or they are people who are self-employed. And if you look at the demographics, these are more Republicans than Democrats. So basically what's happening here is that by stopping paying these subsidies, the president isn't actually hurting these lower-income people because they still have to get it. He's hurting these higher-income people, many of whom are Republican voters.

MARTIN: What are the next steps here that we should be looking at as we try to evaluate what's going to happen?

ROVNER: We've already seen 18 states and the District of Columbia file suit to require that the payments be continued. The reason the president was able to stop this is that it was a subject of a lawsuit about whether Congress officially appropriated the money or not. That lawsuit was actually on appeal and the lower court finding had been stayed.

So the president could have kept this money coming, but the states are now going to court to try to get them reinstated. We'll see. If not, open enrollment is in two and a half weeks. And basically what the president has done - I think this was his intent - is to just confuse things so much as to try to depress enrollment so we can come back and say, look, it's all failing.

MARTIN: That's Julie Rovner. She's chief Washington correspondent for Kaiser Health News. Julie, thanks so much for speaking with us.

ROVNER: You're so welcome. Transcript provided by NPR, Copyright NPR.