Tennessee Planned For President Trump To Cut Obamacare Payments To Insurers

Tennesseans on Obamacare insurance should not see any immediate change from President Trump’s announcement to end some subsidies, according to the state’s top insurance officials. This possibility had already driven insurers to hike their rates for plans on the Obamacare exchange.

These are not the subsidies that individuals get to pay their monthly premiums. Instead, the so-called CSR payments, go directly to insurance companies. In turn, they discount the co-pays and deductibles for qualifying patients on Obamacare plans, which includes about 59 percent of all Tennessee enrollees, according to the office of Congressman Jim Cooper.

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Cost-sharing reduction payments explained

“Tennessee required the insurance companies, when they were submitting their premium rate filings — their proposed increases — they required insurance companies to assume this is exactly what was going to happen,” says Brian Straessle of the non-partisan
Sycamore Institute.

According to Sycamore’s calculation, the prospect of losing the CSR payments accounted for about 14 percent of the overall price increase for Obamacare plans in Tennessee this year.

Tennessee Insurance Commissioner Julie Mix McPeak says in a statement that insurers are just going to have to do without the money.

“The President’s decision will not impact those approved rates, and Tennessee consumers will continue to have marketplace options available for next year,” she says. “However, the carriers will not be reimbursed for the benefit that federal law requires them to provide.”

McPeak,
who has testified multiple times to Congress on the matter, has been sympathetic to insurance companies. She and Sen. Lamar Alexander have suggested
the administration should keep making the payments until they come up with another plan.

“These payments help to reduce the cost of premiums and co-payments for the roughly 4 percent of insured Americans who get their insurance through the exchanges on the individual market,” Alexander said in June.

So far, Alexander has not commented on President Trump’s announcement to end the payments.