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Trump’s cut in insurance subsidies will have minimal impact in Alaska, official says

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WASHINGTON — President Donald Trump's decision to end federal payments for cost-sharing subsidies on the individual health insurance markets will not have a dire impact on Alaska's consumers, according to the state's top insurance official.

Unlike many states, which could see big jumps in premiums for people who buy insurance on the individual markets, but don't receive the subsidies, the impact will be small in Alaska.

Premium tax credits remain in place. And the cost-sharing subsidies, for which Trump pulled federal funding late Thursday, will still be available to consumers — that's a requirement of the law. The insurance companies just won't be reimbursed for them.

So the companies — in Alaska that means Premera, the only insurer left on the individual market — will pass those lost funds on to consumers. That will mean a 4 to 5 percent increase in premiums for the consumers on Alaska's market who don't get the subsidies, according to Lori Wing-Heier, director of Alaska's division of insurance.

Wing-Heier is the person who just about everyone at the top turns to when they want to understand the individual market in Alaska. That includes Alaska's U.S. senators, Dan Sullivan and Lisa Murkowski, who may disagree with each other, but both tout Wing-Heier's expertise.

On Friday, Wing-Heier said she was worried that Alaskans may make too much of the move, and opt not to enroll in insurance plans, figuring that it's going away, or the market is about to implode.

That's not the case, she said.

In fact, when Premera initially announced plans this summer to cut premiums on Alaska's individual market by 21 to 22 percent in 2018, that number assumed that Trump would have cut the subsidies.

Premera later submitted a rate decrease of 26.5 percent for "silver" plans, if the subsidies remained in place. So buyers are "not going to get as big a decrease as we'd hoped," Wing-Heier said.

Premera spokeswoman Melanie Coon said the company "will coordinate closely with state regulators and HHS in the coming weeks, with the goal of having up to date and accurate rate information available to customers in time for the upcoming 2018 Open Enrollment season."

Affordable Care Act enrollment runs from Nov. 1 to Dec. 15 — a shortened period from past years. The Trump administration has also cut back on advertising and plans to shut the enrollment website down for hours each Sunday for maintenance during that time.

"Eligible customers will still receive the cost sharing reductions in 2018, only the cost of those subsidies will now be included in the monthly premium rates for Silver plans," Coon said.

Premera was not happy with the decision to end the subsidies, and Coon argued that ending the subsidies "will make it harder for patients to access the care they need."

In Alaska, the total spending on cost sharing reductions is about $10 million a year, which isn't substantial in the bigger picture, Wing-Heier said. The state has a "highly subsidized market," but in other forms.

The market is still "volatile," Wing-Heier said, but claims have come down, Medicaid expansion took pressure off the market, and the state's reinsurance program, which shifted federal funds to pay for high-cost treatments, "certainly helped," she said.

Wing-Heier said she is more concerned about the other actions taken by the Trump administration of late: his announcement that large employers don't have to cover contraceptives, and the executive order signed Thursday that orders several agencies to rewrite regulations surrounding small businesses and "association" health plans.

"If (Trump is) able to meet the three pieces of his executive order," for the Department of Labor, the Internal Revenue Service and the Department of Health and Human Services, "it will have a greater impact on Alaska than the CSRs will," Wing-Heier said.

Wing-Heier's reassurances about Alaska's markets came in contrast to warnings about impacts to many states in the Lower 48. While Alaska's "reinsurance" program has taken the heat off of the otherwise costly program, rates were already expected to rise across the country in 2018.

Nationally, insurance companies and medical groups decried Trump's move on Friday.

American Medical Association President David O. Barbe worried that it would undercut bipartisan efforts that have been underway in the Senate. The move adds uncertainty to the "marketplace just as the abbreviated open enrollment period is about to begin … threatening access to meaningful health insurance coverage for millions of Americans. … We urge Congress to accelerate its efforts to reinstate these payments before further damage is done," he said.

No members of Alaska's congressional delegation had comments to offer on the subsidy cut. Murkowski was attending a conference in Iceland, and staff said she was not available. Rep. Don Young was traveling back to Alaska, according to a spokesman. And Sullivan's office said he was reviewing the move and would have more to say next week.

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