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President Donald Trump is threatening to cut the health-care subsidy payments that make Affordable Care Act plans affordable.
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The Affordable Care Act insurer in 13 of Arizona’s 15 counties plans to raise average rates across all plans a moderate 7.2 percent next year.

But Blue Cross Blue Shield of Arizona officials said the rate increases would be flat if President Donald Trump’s administration did not plan to eliminate a key Affordable Care Act funding source. 

Trump suggested in a weekend tweet that ” … bailouts for insurance companies and bailouts for members of Congress will end very soon” unless Congress acts quickly on a new health bill.

Health-policy experts believe Trump is referring to an “Obamacare” funding source known as “cost-sharing reduction payments,” which are used to offset insurance costs for low-income earners.

These are federal payments made directly to insurers to offset costs of a health-law requirement that companies sell plans with reduced deductibles and co-payments to consumers who earn less than 250 percent of the federal poverty level. 

The Congressional Budget Office estimated the cost of those payments will rise from $7 billion in 2017 to $16 billion in 2027.

Even if the federal payments are eliminated, insurers would be required to sell insurance plans that reduce lower-income families’ out-of-pocket health-insurance expenses.

Those higher-cost burdens could prompt insurers to raise rates or exit markets altogether, according to an analysis by Kaiser Family Foundation. 

Blue Cross Blue Shield of Arizona, which sells marketplace plans in all counties except Maricopa and Pima, has filed its proposed 2018 rates with the Arizona Department of Insurance. The rates assume the cost-sharing payments will be eliminated next year. 

Blue Cross Blue Shield estimated that the average rate increase across all plans is 7.2 percent, said Jeff Stelnik, senior vice president of strategy, sales and marketing.

Jeff Stelnik, senior vice president of strategy, sales and marketing for Blue Cross Blue Shield of Arizona. (Photo: The Republic)

He said some plans will have no increase at all, while the bare-bones catastrophic plans that cover fewer than 1,000 Arizonans under the age of 30 year will increase 20 percent. 

Rates for the “benchmark plan” — a community’s second lowest-cost silver plan that helps determines tax-credit subsidies —  will increase by 16 percent. 

Given the uncertainty surrounding the Affordable Care Act, with efforts to repeal and replace President Barack Obama’s signature health law, Stelnik said Blue Cross has been in close contact with the Arizona Department of Insurance should it need to refile rates.

“We are going to push out the timeline as long as government allows,” Stelnik said. 

If the federal government allows cost-sharing payments, “We’re looking at something like a flat increase across all plans,” he said. 

Arizona’s other marketplace insurer, Centene’s Ambetter from Health Net, has not publicly discussed its 2018 rate filings. Ambetter is the only marketplace insurance plan in the state’s two largest counties, Maricopa and Pima. 

READ MORE:  Arizona ‘Obamacare’ insurers to stay put in 2018

The Arizona Department of Insurance has not publicly released details on marketplace plans for 2018. The Trump administration, however, could release details on Tuesday for plans nationwide that seek double-digit rate increases.

Arizona last year often was cited as an example of the Affordable Care Act’s troubles. Trump and U.S. House Speaker Paul Ryan described Arizona’s exodus of marketplace insurers and triple-digit rate increases as evidence that the health-care law needed to be repealed and replaced. 

Gov. Doug Ducey echoed those sentiments, describing Arizona as “ground zero” for the health law’s ill effects on the insurance market.

But Stelnik said Blue Cross Blue Shield’s insurance markets in Arizona’s 13 mostly rural counties have been relatively stable following last year’s large rate increases.

So far this year, the insurer’s premiums have exceeded the amount paid out in medical claims.

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Two factors help explain that: plans that emphasize the role of primary care doctors and providers in better coordinating care and the insurer’s familiarity with the risk of the insurance pools.  

“We have some concerns about the long-term stability” of the health law, Stelnik said. “Continuing with cost-sharing reduction payments is critical for providing some sort of affordability in the future.”

While Ducey has sought to shield Arizona from steep cuts to the state’s Obamacare-funded Medicaid expansion, he has remained critical of the health law’s impact on private insurance markets.

“The problems with Obamacare and the damage it’s inflicting on health-care insurance markets, especially in AZ, are real and continue,” Ducey tweeted on Monday, adding that he met with other governors and Trump administration officials to “identify a better solution for Arizona.”

Others said the Trump administration’s actions could create further uncertainty and higher rates.

“Defunding cost-sharing reductions or removing other protections for consumers continues a piecemeal approach to health care,” said Diane Brown, executive director of Arizona Public Interest Research Group Education Fund. “What is really needed is going back to the drawing board and coming up with a comprehensive approach that works for consumers.”

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