Legislature, insurers look to cover federal health subsidy cut
In the wake of President Donald Trump’s cutoff of federal funding for a health insurance subsidy in October, state officials, insurers and lawmakers are considering a plan to ease the impact on Vermonters.
Lawmakers anticipate moving quickly to allow reworking of some health care plans, as the insurance rate-setting process for next year is set to kick off within weeks.
A Trump executive order in October ended federal funding for a subsidy, part of the Affordable Care Act, aimed at stabilizing insurance premiums and keeping costs manageable for consumers.
However, a mandate in federal law continues to require insurers to offer a silver-level health plan at reduced cost to people whose income is up to 250 percent of the federal poverty level. Without federal dollars, insurance companies are left to bear the cost of that benefit themselves, which is expected to drive up premiums for all health plans.
Now, key players in Vermont’s health insurance sector are backing a proposal meant to prevent across-the-board increases because of Trump’s action.
The proposal would take advantage of a different federal subsidy — the premium tax credit — to make up for the loss of cost-sharing funding.
Under this scenario, premiums would increase only on silver-level health plans sold on Vermont Health Connect. Blue Cross Blue Shield puts that increase at 10 percent. Customers would be shielded from paying the higher rates themselves.