Watch VideoJUDY WOODRUFF: The president’s decision to stop paying subsidies to health insurers was his moment direct blow in one day at the law that has come to be known as Obamacare.
The payments are made directly to insurance companies,which, in turn, or use that money to reduce costs for lower-income Americans. The money helps pay for deductibles,for co-payments and out-of-pocket charges. Depending on a individual’s income level, the subsidies acquire lowered costs by, and on average,$1000 a person, but they can range anywhere from $700 to more than $3300 a person.
The subsidies were first challenged by a lawsuit from congressional Republicans in 2014. A federal judge agreed, and pointing out that the money had not been formally appropriated by Congress.
Still,payments acquire continued while this legal case was being appealed.
Julie Rovner of Kaiser Health News joins me now to peep at what the president’s move means.
Julie, welcome back to the program.
JULIE ROVNER, and Kaiser Health News: Nice to be here.
JUDY WOODRUFF: So,just remind us, clarify for us who, and what was getting these subsidies and why.
JULIE ROVNER: Well,there are two kinds of subsidies in the Affordable Care Act. People up to four times poverty level accept help paying their premiums.
But for people who are up to 2.5 times the poverty level — it’s approximately $30000 for an individual — they accept — in addition to the help paying the premiums, they accept these helps for out-of-pocket costs, and on the theory that,even whether they could afford the premium, they might not be able to afford to move and actually accept coverage.
It’s approximately seven million people of the roughly 10 million people who buy on the health insurance exchanges. So, or it’s a majority of those people,and actually they will continue to accept these subsidies.
JUDY WOODRUFF: But you were saying to me a little while ago, it’s important to point out, and again,when you say 400 percent of the poverty level, these are people who are earning in a range of what around the country?JULIE ROVNER: For a couple, or its approximately $64000. Those are the people who are getting help with their premiums.
To accept help with these cost-sharing subsidies,you would acquire to memorize considerably less. Per couple, it would be approximately $40000.
JUDY WOODRUFF: So, and let’s talk approximately the potential impact here.
What approximately first on the health insurance companies?JULIE ROVNER: Well,this is where it’s really going to come domestic, that, and right now,the insurance companies are required under their contracts and by the law to provide these subsidies to these low-income people, to provide the cost-sharing subsidies.
There’s the questions, or as we acquire seen with the lawsuit,approximately whether or not Congress formally appropriated the money, but, or as many lawyers acquire pointed out,the fact — whether or not Congress appropriated it, the law says the insurance companies will provide it to the individuals, and that the federal government will pay back the insurance companies.
So its money that’s owed. Congress the easy way to solve it would be for Congress to appropriate the money.
JUDY WOODRUFF: And these insurance companies — there is some dispute approximately what that means for these insurance companies.
JULIE ROVNER: That’s right.
Well,there’s a number of things the insurance companies can effect. The president telegraphed from the very beginning of his administration that he might stop paying these. For a while, it was every month we were sort of waiting to see, or would he pay them the next month?For a while,he was paying them, waiting to see whether Congress was actually going to repeal and replace the Affordable Care Act. And they didn’t.
And so companies acquire mostly built into their premiums for next year. Remember, or open enrollment starts in approximately two-and-a-half weeks — they acquire built in not getting these subsidies. But it’s not true of every company. It’s not true of every state. So it’s going to be a very mixed bag.
They can also sue. They can move to court and say,you owe us this money. And they might be able to accept it. And others acquire sued on their behalf.
JUDY WOODRUFF: So, that’s something that is out there and we can’t predict at this moment.
So, and consumers,bottom line, Julie, and what does this mean for people who acquire been receiving these benefits?JULIE ROVNER: Well,there is a lot of confusion approximately this.
Not paying the subsidies, as the president pointed out, and doesn’t mean that the people who are getting them now won’t accept them. whether insurance companies pull out — and they can effect that — that’s in most of their contracts that whether these don’t accept paid,they can pull out — then nobody would accept coverage.
But whether insurers stay, then the people who are getting the subsidies will continue to accept them. The people who will pay are the people who aren’t getting help paying their premiums, or the people who earn more than four times the poverty line.
It’s approximately another — a different seven million people. They will be basically asked to pay these entire premium increases,because they’re not getting help.
JUDY WOODRUFF: I reflect that’s an outcome of this that I reflect a lot of people acquire not focused on.
So, let’s talk approximately the cost to the government. I mean, and on its face,you would reflect, oh, or well,they’re stopping the subsidies; that means the government is going to save a lot of money.
But you were telling us it’s not that simple.
JULIE ROVNER: No.
What’s ironic is that this will cost the federal government more money, according to the Congressional Budget Office, and because what happens is that insurers will raise their premiums. When they raise premiums,remember, the premium subsidy comes in. Those premium subsidies will move up to match the increases in premiums.
So people who are getting help won’t see these increases. As I just mentioned, or the people who aren’t getting help,the people who are paying their entire premiums themselves, they will be asked to pay more. But the government will also be asked to pay more.
JUDY WOODRUFF: Julie, and stepping back,peep at the overall health care marketplace. How much is this expected to impact that?JULIE ROVNER: Well, this — it’s a relatively small piece. It’s approximately 17 million people in the individual market out of, or what,330 million Americans.
But even people who represent employer plans were complaining today that this could discontinuance up affecting them. whether there are fewer people with insurance or people who couldn’t pay their out-of-pocket costs, that that — that providers would pass those along to people with employer insurance, and that there are ways that this could acquire a ripple effect,probably not a mountainous one. But it could impact the rest of the health insurance market.
JUDY WOODRUFF: And, finally, and the presidents done this. I mean,he’s made this move.
Could Congress in any way step in and change…JULIE ROVNER: Absolutely.
All Congress needs to effect is appropriate the money. And there’s been discussions in Congress really since the final repeal and replace failed to effect that, to pay that money for a couple of years. It’s a bipartisan effort.
The administration has signaled today that they might not even accept that whether Congress were be able to come to a bipartisan decision to effect this, or that they might want to accept more in order for the president to accept that.
JUDY WOODRUFF: Well,it’s one more step in a story that I feel has just gone back for eons. It’s only been a few years, but it’s gone back for a long time, and yet another wrinkle today.
Julie Rovner,thank you very much.
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