President Trump's decision to end ACA subsidy creates fresh uncertainty

• 'One of the most eventful days in health policy'
• A small business owner watches the changes with trepidation
• More ambiguity lies ahead in 2018

Tennessee's individual health insurance market is entering uncharted territory after a pair of actions from President Donald Trump Thursday cast a heavy pall over the nearly five-year-old market only weeks before open enrollment begins. 

The White House announced via a late-night statement it will not continue to make cost-sharing reduction payments (CSRs) to insurers — a subsidy thrust into the spotlight as the administration wavered on the future payments, which had become a month-by-month decision. 

The long-sought guidance rebukes efforts by state insurance regulators, including Tennessee's commissioner, insurance companies, patient advocates and physician groups to get an affirmative commitment on the future of a payment they say is necessary to making the economics of the insurance exchange work for insurers and shoppers alike. 

The CSRs are a "bailout of insurance companies" through "unlawful" payments that are not appropriated by Congress, the White House statement said. 

"These unlawful payments (are) yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system. Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people," the White House statement said.

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'One of the most eventful days in health policy'

The decision, coupled with an executive order earlier in the day that could give new life to short-term insurance and association plans, was "what has to be one of the most eventful days in health policy since the November election," wrote Emily Evans, Nashville-based managing director of health policy at Hedgeye. 

Healthcare.gov will open for enrollment on Nov. 1, and shoppers in Tennessee will be paying premiums that already reflect the suspense hovering on the industry for months. 

In the absence of a successful repeal-and-replace effort — which died in both the House and Senate — Trump is making good on campaign promises to repeal the Affordable Care Act by taking administrative actions, said Dr. Mike Schatzlein, the former CEO of Saint Thomas Health who is now of-counsel at Jarrard Phillips Cate & Hancock.

"If you start to add everything up —  the reduced ads, the reduced money for the navigators, you can just go right down the list — it’s not a secret sabotage because the president said this is what he was going to do," Schatzlein said. "He was going to wreck Obamacare. They failed to do that legislatively. They are now doing it administratively."

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The actions throw doubt on whether the U.S. Senate will be able to reach a bipartisan solution, spearheaded by Senators Lamar Alexander, R-Tenn. and Patty Murray, D-Wash., to quiet the individual insurance market that can pass both the House and get Trump's signature, said health care leaders. 

"I think the Senate health committee has been essentially neutered," said Paul Keckley, a Nashville-based health care consultant and analyst. "I don't have a lot of hope that (the committee) can pull a rabbit out of the hat."

Some Trump supporters will rally behind the decisions, said Schatzlein, but without guidance on what the administration or Congress will put in its place the actions will "directly harm on those who are least able to deal with it."  

A small business owner watches the changes with trepidation 

For people like Tony Gross, who runs a small family business and is mayor of Kingston Springs, the twin actions cast doubt on his ability to offer insurance to his employees —which the ACA allowed him to do for the first time — or afford individual coverage. 

Gross has been watching the string of coming changes while he contemplates his strategy for 2018. The plan he currently offers is being discontinued so he's trying to decide whether to give employees — his company, Datco, makes industrial hot glue equipment —  a raise so they can figure out their own insurance or if there's a small group plan that works. 

He and his wife had deductibles around $10,000-12,000 before the ACA so they were emergency-only plans. Obamacare brought more benefits and plans with deductibles they could actually use.

“You're always kind of on edge. Up until a few days I thought we’d be okay,” Gross said. "As a small business, you'd like to see some stability in health care. This year it’s way more unstable than in previous years."

He's frustrated that people "think everything is bad because of Obamacare — I don’t think they’ve ever actually looked at it to see how it works.”

More ambiguity lies ahead in 2018

Tennessee's insurance commissioner Julie Mix McPeak chased the administration earlier in the year for clarity about CSRs. Without a commitment, insurers planning to sell in Tennessee were asked to calculate premiums on the assumption there would be no payments. 

The state's market for 2018 is largely set — barring litigation that gives insurers flexibility to amend or end contracts. 

But White House actions extend the ambiguity that's left insurers and shoppers unnerved well into the next year.

Insurers will have to start deciding their plans for 2019 not long into the new year. A new crop of short-term or association plans could attract healthier people from the risk pools, raising rates for sicker people or leaving more people uninsured altogether.

The state's insurance rate is at an all-time low, 9 percent, according to the Census Bureau.

Insurers will start thinking about their 2019 strategy early in the new year, and have to start submitting preliminary documents in the spring. 

“If you were to write a script to do everything to sabotage the marketplace they are following that script," said Keckley. "I think it’s the first step of forcing (ongoing) political discussion. There's going to be collateral damage. Period.

“This a gauntlet that’s been laid down to the market place that says we’re willing to let the market place be chaotic for at least six to 12 months and let the 2018 election cycle be around the flaws."

Reach Holly Fletcher at hfletcher@tennessean.com or 615-259-8287 and on Twitter @hollyfletcher.