Virginia ACA Providers Face a Federal Funding Cut With a Fast-Approaching Deadline

Jul 31, 2017

Credit AP Photo / Andrew Harnik

President Trump has repeatedly vowed to cut off federal funding for the subsidized health-insurance plans that are at the center of the Affordable Care Act. If he decides to pull the trigger on that, what would happen in Virginia?

Right now, Virginia’s health-insurance marketplace has seven providers that have filed paperwork in anticipation of offering subsidized plans next year. Premiums are expected to increase from 10% to 54%, depending on the plan. But that’s only if the federal government continues throwing down money for the cost sharing subsidies — monthly payment known as CSRs. Sabrina Corlette at Georgetown University says:

"Eliminating the CSRs could very well trigger what we call in the insurance world a death spiral where you have rates going up and healthy people fleeing. So it really could trigger the implosion of the ACA marketplaces just as the president has been threatening.”

Insurance companies in Virginia are facing a hard and fast deadline — August 16th. If the president waits more than a month to make an announcement about ditching CSRs, providers will already be locked into plans for 2018 they’ll want to modify. Then they’ll raise premiums again. Len Nichols at George Mason University says that will start a chain reaction as healthy people flee and the risk pool becomes sicker.

“And so at the end of the day, premiums will end up being higher than they would have been and they’ll end up costing the federal government more than it would have cost them if they had just paid the cost-sharing subsidies in the first place.”

The insurance companies still have about two weeks to modify their plans before they are locked into place for 2018. So they are hoping to get some certainty one way or another very soon.

This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association