President Trump’s decision to stop paying subsidies to insurance companies means many middle class families will likely pay more for coverage. As part of the Affordable Care Act, insurers got those payments to help make health insurance affordable for customers.
Since President Trump had been threatening to stop these payments for a while, many insurers already planned for this change when they set prices for 2018 health insurance plans. But some of the about 700,000 people in Carolinas who get their insurance through the federal exchange will feel the impact more than others. That’s because there are two ways the government helps people on the exchanges pay for insurance. One is by giving insurance companies money so they can make plans more affordable. The other type of financial aid goes right to the individual buying coverage in the form of a tax credit, which has not been changed.
Despite rate increases from the two insurers in North Carolina offering plans on the exchanges, lower income consumers who get bigger tax credits likely won’t end up having to pay much more out of pocket. Blue Cross Blue Shield of North Carolina said it is increasing rates an average of 14 percent and Cigna an average of 25 percent. Blue Cross Blue Shield of South Carolina, the only insurer offering plans on the federal marketplace in that state, said the largest rate increase will be 31 percent. But according to the insurer, rates for 82 percent of its customers buying plans on the exchanges will see an increase of about $10 a month.
People who will likely end up paying more for coverage are those who make too much to qualify for tax credits. For perspective that’s a family of four with an income of more than $98,400 a year. The Congressional Budget Office estimates their premiums could go up about 20 percent. Blue Cross Blue Shield of North Carolina said stopping these payments will make it harder for insurers to participate in the exchanges in the future.