Individual market endangered by uncertainty over subsidies

Kevin B. O'Reilly , Senior News Editor

Health insurers in most states have until June 21 or sooner to decide whether they will participate in the federally facilitated marketplace exchanges in 2018. In several states, that deadline has already passed without any certainty regarding the future of vital federal funding that helps millions of Americans shoulder the burden of deductibles and co-pays.

Billions of dollars in cost-sharing reductions (CSR) that go to an estimated 7 million patients could be affected unless Congress moves quickly to eliminate “the single most destabilizing factor causing double-digit premium increases for 2018,” according to a group of organizations representing America’s physicians, hospitals, businesses, employers and health insurers.

“Unless CSRs are funded, a tremendous number of Americans will simply go without coverage and move to the ranks of the uninsured. This threatens not just their own health and financial stability, but also the economic stability of their communities,” said a letter sent recently to Democratic and Republican Senate leaders by the AMA, American Academy of Family Physicians, American Hospital Association, Federation of American Hospitals, American Benefits Council, U.S. Chamber of Commerce, America’s Health Insurance Plans, and the Blue Cross Blue Shield Association.

“Continued uncertainty, particularly the lack of clarity around CSR payments, has led several insurers to conclude that they cannot participate for 2018,” the letter says. “Those who will participate are responding to the market uncertainty with premium requests that are as much as 60 percent higher than last year.”

Consumers seeking coverage in the individual market “will have few, if any, coverage choices. As a result, millions of people will become uninsured,” the letter adds. More uninsured patients will lead to more care that goes uncompensated for physicians, hospitals, clinics and other health care organizations “and will raise costs for everyone, including employers who sponsor group health plans for their employees.”

Meanwhile, “taxpayers will pay billions of extra dollars in costs due to higher premium subsidies—in fact, recent studies have found overall federal costs will be 23 percent higher,” the letter says.

Related Coverage

Health reform: Patients deserve a healthier individual market

The uncertainty arises from disputes over the legality of CSRs. In 2014, House Republicans sued the Obama administration over the subsidies, arguing that the financial help was being paid illegally because it had not been specifically appropriated by Congress. A federal court ruled in favor of the House Republicans but the decision was stayed pending appeal. The Trump administration was given 90 days to decide whether it wanted to continue to appeal the ruling, and on Monday asked for another three months to mull their next move in the case, House v. Price.

The National Association of Insurance Commissioners last week wrote to Senate leaders, saying “the time is now” to ensure that CSRs are fully funded for 2017 and 2018. If the administration opts to drop the appeal, then the subsidies will end unless Congress takes action to fund them.

Standards that health reform should meet

The other major front in the health-system reform debate is continuing to unfold, also in the U.S. Senate. AMA CEO and Executive Vice President James L. Madara, MD, last week sent a letter to Senate Majority Leader Mitch McConnell and Senate Minority Leader Charles Schumer reaffirming the principles the AMA believes should guide the Senate in its consideration of potential changes to the Affordable Care Act.

“We have consistently recommended that any proposals to replace portions of the current law should pay special attention to ensure that individuals currently covered do not lose access to affordable, quality health insurance coverage,” Dr. Madara wrote. “Proposals should maintain key insurance market reforms—such as coverage for pre-existing conditions, guaranteed issue, and parental coverage for young adults—as well as stabilize and strengthen the individual insurance market, ensure that low- and moderate-income patients are able to secure affordable and adequate coverage, and adequately fund Medicaid, Children’s Health Insurance Program and other safety net programs.”

Taking steps to strengthen and stabilize the individual insurance market is one of the nine objectives guiding the AMA’s health care reform discussions with the administration and Congress. Read more about the Association's comprehensive vision for health-system reform, refined over more than two decades by the AMA House of Delegates, which is composed of representatives of more than 190 state and national specialty medical associations.

You can further explore the AMA’s health reform objectives at, an online platform designed to educate and engage patients and physicians on the current debate. The site makes it easy for patients and physicians to write their elected Congressional representatives and urge them to protect Americans’ access to quality care.