Secretary of Health and Human Services Tom Price testified at a Senate Budget Committee hearing Thursday and would not say whether the Trump administration would make cost-sharing subsidy payments put in place by the Affordable Care Act.
Obamacare created these subsidies to rein in the cost of out-of-pocket expenses for lower-income individuals by reimbursing insurers. These payments were put into question after two House committees investigated the source of funding and said they were unconstitutionally made because they were made without an appropriation from Congress.
Sen. Debbie Stabenow (D., Mich.) asked the secretary whether or not these payments would be made and suggested that insurers will hike rates due to the increased uncertainty. Price would not directly answer her question, but instead pointed to costs and decreasing insurance availability, which he said has caused uncertainty.
"Why are you not willing then to indicate that as long as we have the system we have, you're going to keep the commitments and reimburse the insurer companies so they have certainty?" Stabenow asked.
"Nobody is interested in sabotaging the system," Price said. "Nobody is interested—nobody is cheering the challenges that we have in this system."
"In your state alone, premiums were up 90 percent before this president came into office," he said. "The number of insurers was down before this president came into office in your state."
"Well I can assure you after meeting with the head of BlueCross BlueShield of Michigan, they are going to file two rates when they file their rates," she said. "One if the administration keeps their commitments and one if they don't. And if they don't, they're going to be much higher."
"In the meantime, you have insurers that are saying the reason the rates are going up [is] because of uncertainty and instability created by the administration," she said, citing an article in the Washington Post. "Why is that a good idea?"
"Actually senator, if you read further in that article it talks about the increase in costs and decreasing insurance availability for individuals across this nation before this administration came into office," Price said. "So what we're trying to do is to fix the challenge that we have."
According to a study from the Kaiser Family Foundation, if the government fails to fund the subsidies, premiums will increase by 19 percent.
"The analysis—based on cost-sharing subsidy payments and benchmark premiums in federal marketplace states in 2016, the most recent data available—finds that the estimated premium increase for silver plans would be higher (21%) in states that did not expand Medicaid under the ACA than in states that expanded Medicaid (15%)," the report notes.