There are a lot of questions about what President Trump’s Executive Order means to those who currently receive tax credits and cost sharing reductions for the health insurance plan they purchased through the Health Insurance Marketplace. First, it is important to know that there are two types of subsidies that individuals or families can receive.
The first type of subsidy is called the Advanced Premium Tax Credit (APTC). The APTC is a federal subsidy available to individuals and families who earn between 100% and 400% of the Federal Poverty Level (FPL). This subsidy helps to pay part or all of your health insurance premiums in order to make your insurance more affordable. The APTC is not affected by the President’s Executive Order.
The second type of subsidy is called Cost Sharing Reductions (CSR). A CSR is a subsidy that lowers the amount you have to pay for deductibles, copayments, and coinsurance. In the Health Insurance Marketplace, cost-sharing reductions are often called “extra savings.” Only Silver plans are eligible to receive CSRs and your annual household income must be between 100% and 250% of the FPL in order to receive this subsidy. The President’t Executive Order directly affects CSRs by ending those payments to insurance carriers.
Many insurance carriers and state insurance regulators anticipated the possibility of CSR payments ending. In preparation for this possibility, some states’ insurance regulators directed ACA insurers to add a surcharge to premiums in case the payments were not made. This means the insurance carriers that added the surcharge to their premiums will be able to continue to offer plans with the CSR discounts in 2018. However, ending CSRs will make it harder for insurers to plan to participate in 2019.
Many Washington insiders and political pundits believe this Executive Order was issued to create a sense of urgency and force both Democrats and Republicans to come to the table and negotiate a fix to the current healthcare system. Repeal and replace of the ACA law is probably no longer a possibility. However an overhaul of the existing ACA law with bipartisan support is most likely what will happen.
Here is the good news if you receive the APTC and CSR for your health insurance in North Carolina (NC). The NC Department of Insurance directed all carriers offering ACA plans in NC to add the surcharge when submitting rates for 2018. This means that ACA plans in NC will continue as they have with no disruption for 2018.
Open enrollment for 2018 plans begins on November 1st and runs through December 15th. If you have questions or need assistance with enrollment click here or call Health Enroller at 844-680-7855.