RELEASE: New CAP Report Estimates Health Insurance Premium Cost Increases due to Trump-Caused Uncertainty, Continuation of Health Care Negotiations
Washington, D.C. — The Center for American Progress is releasing a first-of-its-kind analysis that estimates the cost resulting from the uncertainty generated by congressional Republicans’ and President Donald Trump’s threats to both repeal and undermine the Affordable Care Act, or ACA. CAP’s analysis estimates that premiums could increase by $480 to $960 annually because of the uncertainty Trump has created through continued statements and tweets threatening to undermine the market and to stop making required payments to reimburse insurers for lowering consumers’ deductibles and co-pays.
“Even Trump’s empty words will have real costs for people. Trump and congressional Republican leadership should stop looking to repeal the ACA and stop rooting for the insurance marketplace to fail. These irresponsible actions are driving up prices for millions of hardworking Americans,” said Sam Berger, Senior Policy Adviser at CAP.
“Every threat to undermine health coverage for the American people contributes to uncertainty that will drive premiums up by hundreds of dollars. In order to ensure market stability and avoid creating bigger health care bills for families, Trump needs to stop creating uncertainty in the market and commit to full implementation of the ACA,” said Emily Gee, Health Economist at CAP.
Insurers are currently setting prices for 2018, with proposed rates coming in the next month or two and final rates expected by late summer or early fall. Given the current uncertainty, insurers will be forced to account for possible cost increases resulting from legislative changes or executive actions by the Trump administration. The higher the risk, the greater the pressure on insurers to hike rates beyond what they would otherwise charge.
The report focuses specifically on the threat to cost-sharing subsidies and the individual mandate. CAP relied on estimates from the nonpartisan Commonwealth Fund on premium increase from the loss of cost-sharing reduction payments—which it estimated at 14 percent—and from the Congressional Budget Office on the repeal of the mandate—estimated at 20 percent. Adding these two estimates together, CAP reached the total premium increase if both occur: 34 percent. At both the national and state level, CAP then calculated what would happen if insurers think there is a 25 percent or 50 percent chance of these events occurring, which would equate to a premium increase of 8.5 percent or 17 percent above normal levels.