How Trump's Threat To Withhold Insurance Payments Could Affect Kentucky

If you’ve ever had health coverage through Healthcare.gov, the federal government has subsidized some of the cost of that insurance. But President Donald Trump signaled this week that the payments the federal government makes to insurers to pay for that coverage, might not come this year.

That could send the individual health insurance market into chaos.

Cost-sharing reductions, or CSRs, do what they sound like they do: They reduce the amount of money you have to pay for deductibles, copays and coinsurance, based on income level.

The Affordable Care Act requires insurance companies to pay for a certain percentage of the cost of a policy sold on the marketplace, depending on the plan and the income of the policyholder. The federal government gives insurers some of the money back for deductibles and copays through a CSR.

For the past few years, Congress has approved those payments for the insurance companies. But on Monday, President Trump threatened insurance companies via Twitter that the CSR payments might not happen this year.

Currently, Anthem and CareSource are the only two remaining insurers that will offer plans through the federal marketplace next year in Kentucky. Bob Brett, vice president of marketplace plans at CareSource, said if the president follows through on his threat, that would bad news for customers.

“We’ll have to revisit our rates and in all likelihood there will probably be a rate increase to account for the loss of CSRs,” Brett said.

CareSource has already asked Kentucky for permission to increase premiums – or the monthly payments people pay for coverage. If regulators approve the request, on average, premiums would increase 20 percent.

If CSR payments are eliminated, those premiums would likely go up even more. And the Kentuckians who aren’t getting tax credits to pay for their coverage will likely bear the brunt of that increase.