Photo: Shealah Craighead/Getty Images
President Donald Trump has released the “Great Healthcare Plan” that promises to slash prescription drug prices, reduce insurance premiums, hold big insurance companies accountable and maximize price transparency.
Money would be sent directly to consumers’ health savings accounts instead of to insurance companies, according to Thursday’s release from The White House.
The plan has no extension of the Affordable Care Act premium subsidies that until Dec. 31 were paid to insurers to lower premiums. Without the subsidies, premiums in ACA plans were expected to double, with many dropping coverage.
The issue created a bipartisan divide that shut down the government in October.
Before the December recess, the House voted to extend the subsidies for three years. The Senate was expected to take it up later this month, though the consensus was that there was little chance of passage.
Trump’s plan would lower premiums through cost-sharing reduction (CSR) payments, which were originally put into place under Obamacare.
Under the Obama administration, cost-sharing reduction payments were given to insurers in the ACA market to help reduce out-of-pocket expenses such as deductibles, copayments and coinsurance for individuals who financially qualified.
Because Congress never approved the CSR funds, Republicans sued and won. The Obama administration appealed, but under Trump’s first term, the payments stopped.
However, insurers were still required under the ACA to offer qualifying consumers a discount. To make up for the losses, insurers were able to increase premiums on silver plans in a practice known as silver loading.
As most consumers of silver plans were subsidized through premium tax credits, it was the federal government that paid, and not ACA beneficiaries.
How the current CSR program would work was not outlined in the release.
The cost-sharing reduction program for healthcare plans would save taxpayers at least $36 billion and reduce the most common ACA plan premiums by more than 10%, Trump said, citing the Congressional Budget Office.
The plan also would require insurance companies to publish on their websites the percentage of revenues paid for claims versus overhead costs and profits, the percentage of claims they reject and the average wait times for routine care, according to The Hill.
Email the writer: SMorse@himss.org