California: Health plan rates could jump if key ObamaCare payments end

California: Health plan rates could jump if key ObamaCare payments end

California health insurers that sell ObamaCare plans say they could have double-digit premium increases for some plans next year if the Trump administration cuts off key payments to insurers.

Insurers in the state requested a 12.5 percent rate increase on average amid "a time of unprecedented uncertainty," the state's Covered California exchange announced Tuesday.

But Trump — who has called for lawmakers to let ObamaCare "implode" — is threatening to cancel key disbursements under ObamaCare, known as Cost-Sharing Reduction (CSR) payments. If that happens, the state said insurers will tack on an additional 12.4 percent on rates for mid-level plans.


Trump could make a decision on whether to continue making the payments as soon as this week.

“A decision by the federal government is needed in the next few weeks,” Covered California director Peter Lee said in a statement. “Without clear confirmation from the administration that these payments are secured, we will be forced to have health insurance companies in California add a CSR surcharge to the Silver-tier rates.”

California is one of several states that have allowed insurers to file two different sets of premium requests: One for the continuation of ObamaCare, such as CSR payments and the enforcement of the individual mandate, and one in the event both are discontinued.

Trump has warned as recently as Saturday that he could cancel the payments, though it is unclear if he will follow through.

GOP efforts to repeal and replace ObamaCare collapsed late last week, and Trump has stepped up his threats to stop the payments, which reimburse insurers for selling discounted insurance to low-income ObamaCare enrollees.

The announcement from California comes as Sens. Lamar AlexanderAndrew (Lamar) Lamar AlexanderCoronavirus Report: The Hill's Steve Clemons interviews Randi Weingarten China lashes out at US over WHO withdrawal The Hill's Morning Report - Presented by Facebook - Trump backs another T stimulus, urges governors to reopen schools MORE (R-Tenn.) and Patty MurrayPatricia (Patty) Lynn MurrayGOP Health Committee chair says he disagrees with Trump's WHO decision Lobbying battle brewing over access to COVID-19 vaccine Trump officials seek to reassure public about safety of a potential coronavirus vaccine MORE (D-Wash.) — the chairman and ranking member of the Health, Education, Labor and Pensions Committee — announced bipartisan hearings intended to craft a short-term market stabilization proposal by mid-September.

Alexander urged Trump to continue making the CSR payments through September to give Congress time to pass a bipartisan market stabilization measure.

Some insurers have been stepping back from the ObamaCare exchanges due to financial losses as well as uncertainty about the law’s future. For example, Covered California said insurance giant Anthem will pull out of 16 of 19 regions in the state.

The decision won't result in any “bare” counties, but the state said it will mean about 10 percent of those enrolled in Covered California will need to pick a new plan.