Insurance companies are concerned congress may not fund an important federal subsidy approved under Obamacare for the coming year. That could mean higher healthcare costs for Utahns.
The specific subsidy is called a cost-sharing reduction payment. Basically, it’s money that the federal government gives to insurers that reduces the cost of out-of-pocket payments like deductibles and copays for some people enrolled on Obamacare plans.
Tanji Northrup is the Assistant Commissioner at the Utah Insurance Department. She says there’s a possibility the federal government might stop funding this subsidy benefit in 2018.
"So, insurers are going to have to increase their rates to account for that benefit if the federal government doesn’t fund it," Northrup says.
Northrup estimates that could mean a 15-20 percent rate increase for some people with Obamacare plans. This particular subsidy affects people with silver-level plans.
The problem is losing that government money would put extra financial pressure on insurers.
"Insurers have to provide that benefit regardless of whether or not the federal government reimburses them," she says.
Utah’s marketplace insurers are Molina, Select Health, and University of Utah Health Plans. Northrup says the bigger concern is if uncertainty about getting those federal subsidies caused one of Utah insurers to leave the federal marketplace altogether.
"Many states have seen insurers pull out with the uncertainty and have left service areas," Northrup says.
Northrup says she believes all three of Utah’s carriers will remain in the marketplace, but she doesn’t have concrete information yet.
Rates for 2018 health plans will be made public in October.