- The Washington Times - Sunday, April 30, 2017

A major Obamacare insurer says it will quit the program immediately if the White House cancels cost-sharing payments, underscoring the dilemma facing President Trump, who is trying to use the money as leverage to force Democrats to the bargaining table.

Molina Healthcare said it banked on receiving the “cost-sharing reductions” when it agreed to cover more than 1 million people who bought plans on the Affordable Care Act’s exchanges.

If Mr. Trump yanks the payments, “we will have no choice but to send a notice of default informing the government that we are dropping our contracts for their failure to pay premiums and seek to withdraw from the marketplace immediately,” company CEO Mario Molina said Thursday in a letter to congressional leaders.

The cost-sharing payments were designed to cover the shortfall insurers incur by covering low-income customers’ out-of-pocket costs.

Mr. Molina said 65 percent of its 1 million-plus customers are enrolled in plans with cost-sharing subsidies, so removing them would take a heavy financial toll on his company.

Similarly, Anthem, Inc., which covers 1 million people in 14 states, said it plans to return to the exchanges in 2018 but might beat a retreat if Mr. Trump doesn’t guarantee the cost-sharing payments by early June, its CEO told investors.

The payments are at the crux of one of the Obamacare debates on Capitol Hill.

House Republicans have won a judgment in federal court that the payments made by President Barack Obama over the last few years were illegal because they weren’t authorized by Congress.

Democrats said the solution is to have Congress authorize the payments. But Mr. Trump had signaled reluctance, saying Democrats need to come to the bargaining table to talk about the money.

After Democrats threatened to risk a government shutdown over their demands, Mr. Trump agreed to keep paying out the money — without congressional approval. But he still considers the payments illegal, he told The Washington Times.

“Obama has been paying unauthorized funds for three years, which is terrible. It’s unauthorized. You have to have approval from Congress,” Mr. Trump said.

He added: “The public hasn’t been told yet properly because the Democrats keep talking about Obamacare. But when you have an optional payment to be made, that means it’s gone.”

Democrats warned that if Mr. Trump does pull the trigger, he and fellow Republicans will be blamed for Obamacare’s collapse.

Three-in-five Americans, including the majority of Republicans, say that Mr. Trump and congressional Republicans will be responsible for any problems with Obamacare moving forward because they control the government, according to the nonpartisan Kaiser Family Foundation.

House Republicans are working on a broad repeal of Obamacare, and are aiming for a vote soon.

Hard-line conservatives who derailed the first effort in March are now on board, after changes that let states waive Obamacare’s “essential” health benefits and allow insurers to charge healthy people less than sicker ones, so long as they set up a high-risk pool to subsidize people with preexisting conditions.

Yet centrists say allowing states to charge sicker patients more than healthy ones is inconsistent with pledges Republicans made on a campaign trail.

Supporters of the bill say they have reached a good compromise — states don’t have to peel back Obamacare’s rules if they don’t want to — so it is time to let the Senate make its changes and then work out a final bill in conference.

They also say voters are demanding relief from Obamacare’s faltering exchanges, where one third of U.S. counties can choose from just one insurer.

“What I’m hopeful for is that we stop the pain of Obamacare tomorrow,” Rep. Mark Meadows, North Carolina Republican, said outside the House chamber Friday. “Realistically, it looks like it’s going to take a few more weeks to at least get in a position of having enough support in the House and Senate to get it to the president.”

The longer it takes, the more antsy insurers will get.

The main insurers’ lobby, America’s Health Insurance Plans, says the Trump administration is running out of time to make a decision on the payments since plans must decide by June 21 whether they plan to participate in HealthCare.gov, the Obamacare exchange serving dozens of states.

Anthem, which, like Molina Healthcare, serves more than 1 million customers on the exchanges, bemoaned the “significant uncertainty” around the funding stream during its first-quarter earnings call.

“At this point, we plan to file preliminary 2018 rates, with the assumption that the cost-sharing reduction subsidies will be funded,” Anthem CEO Joseph R. Swedish told investors last week. “However, we are notifying our states that if we do not have certainty that CSRs will be funded for 2018 by early June, we will need to evaluate appropriate adjustments.”

 

 

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