Insurer threatens to leave ObamaCare exchanges if subsidies aren’t funded

Getty Images

A top ObamaCare insurer is threatening to drop out of the exchanges if it doesn’t receive key payments from Congress. 

Molina Healthcare, which serves more than 1 million ObamaCare enrollees, warned lawmakers Thursday it will leave the exchanges if it doesn’t receive its cost-sharing reduction (CSR) subsidies, payments that reimburse insurers for giving discounted deductibles to low-income people. 

“If the CSR is not funded, 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,” Molina CEO Mario Molina said in a letter to GOP and Democratic leadership. 

“That would result in about 650,000 to 700,000 people losing insurance coverage in 2017, and we would not participate in Marketplace in 2018, resulting in over 1 million Americans losing health insurance coverage.” 

Cost-sharing reductions have been at the center of a contentious fight in Congress, with Democrats demanding that the payments be included in the upcoming spending bill. 

{mosads}Insurers also want the payments included in the spending bill because they say it would provide more certainty. 

But Speaker Paul Ryan (R-Wis.) said the payments have no place in an appropriations bill and that it’s up to the Trump administration to deal with them.

Republicans are in a tough spot because they sued the Obama administration over the payments, arguing they were made unconstitutionally. But if they don’t make the payments, insurers could drop out of the exchanges or raise premiums, sending the market into chaos. 

The Trump administration has said it will continue the payments, but has not said for how long. They could decide to stop funding the payments at any time. 

Molina said 65 percent of Molina marketplace members are enrolled in plans with cost-sharing subsidies. 

“Removing them will make coverage unaffordable,” Molina wrote. 

“We entered these marketplace contracts with the expectation that the cost sharing reductions would continue to be fully funded.”

Molina also refuted claims that the payments are a “bailout” to insurers after President Trump used that language in a tweet Thursday morning. 

“This money goes directly to providers from the health plan. Any of the CSR money that goes unused is returned to the federal government. Thus, this is not a bail-out or windfall to the insurance company,” Molina said. 

Tags Paul Ryan
See all Hill.TV See all Video