Trump's Obamacare changes are already causing chaos in the healthcare system

  • President Trump cut off key Obamacare subsidies known as cost-sharing reduction (CSR) payments on Thursday.
  • Blue Cross Blue Shield of North Carolina announced Wednesday that it would increase premiums for Obamacare exchange plans by 14.1% for 2018.
  • BCBS NC said if Trump did not cut off CSR payments, premiums increases would have “been near zero.”

President Donald Trump’s decision to end key Obamacare payments is already reverberating throughout the health insurance market.

Blue Cross Blue Shield of North Carolina (BCBS) announced its final Obamacare exchange premium increases for 2018 on Wednesday, and it pinned a significant amount of the increase on Trump.

The insurer, which covers all 100 counties in North Carolina, said the average premium increase for exchange plans would be 14.1%, much lower than the 22.9% originally requested, but much higher than it could have been.

BCBS said it was forced to increase premiums due to lost funding from Obamacare’s cost-sharing reduction (CSR) payments, which help offset insurers’ costs incurred by offering low out-of-pocket cost insurance plans to poorer Americans.

“Had CSR payments not been eliminated, Blue Cross NC’s final rate request for ACA customers’ average would have been near zero; however, most customers receiving premium assistance will see that assistance rise in 2018 to offset the higher increase that was needed,” said a statement
from BCBS North Carolina about the final premium increases.

On Thursday, the White House announced Trump was cutting off the payments for the rest of 2017 and going forward. The payments were in dispute as they were being paid through the executive branch and were not appropriated through Congress. The administration said it could no longer continue to do so legally.

Ultimately, these increased costs will filter to the federal government for the most part. Since most people in the exchanges receive a subsidy to help with premiums, the increase will fall to Washington rather than people’s wallets.

There is a slice of people in the market, roughly 10% according to BCBS NC, who do not receive the tax credit and will therefore bear the brunt of the increase caused by the lost CSRs.

The announcement comes just a few days after a similar announcement from the Department of Insurance in Pennsylvania. According to the department, the average Obamacare premiums in the state would increase 30.6% in 2018, up from 7.6% if the CSRs continued.

Bipartisan legislation to appropriate the CSRs through Congress was released Tuesday, but Trump and other top Republicans came out against the measure Wednesday, throwing its future into doubt.

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