A State-By-State Guide To Those Wonky Obamacare Payments You Keep Hearing About

Some Obamacare plans are going to get more expensive next year, whether Congress likes it or not. The deal that two senators announced Tuesday to shore up the Obamacare marketplaces might have sounded like good news to the millions who rely on them. But even if that deal were to become law (and that already is starting to look unlikely), it almost surely couldn’t happen in time¹ to stop the fallout from President Trump’s decision to halt payments to insurers that help the lowest-income marketplace enrollees. Price increases are coming.

Price increases were happening before Trump’s announcement, but his move to cut funding to insurers means that in most places, prices on some plans will go up even more. In anticipation of this move by Trump, states have been figuring out how the additional costs should be passed on, and their approaches vary; where buyers live, how much money they earn, and how they buy their insurance will determine whether they actually pay an increase.

Using information from ACASignups.net — which tracks and analyzes ACA-related policy — and additional news sources, we’ve categorized those approaches into five groups:

A little bit of background before we get into those categories:

Since the ACA became law, there have been two branches to each state’s private insurance market. One is the ACA marketplace, where people can receive premium subsidies if they qualify based on income² — about 11 million people buy there. The lowest income bracket of people who are eligible for subsidies — those earning between 100 percent and 250 percent of the federal poverty line — are also eligible for a second kind of discount, one that lowers out-of-pocket expenses like deductibles and co-pays. Under the Affordable Care Act, insurers have to provide that second discount (known as cost-sharing reductions), and the federal government is supposed to reimburse them (that’s what Trump is halting).

To make matters more complicated, the cost-sharing reductions apply only to specific kinds of plans — those in the “silver” category³ — and only when those plans are bought through the Obamacare marketplaces. Silver plans are also available in the other branch of the private market, with one big difference: There are no subsidies. Some 7 million people buy on the second branch.⁴

Without those reimbursements, insurers lose money. States have taken a variety of approaches to allow them to recoup the costs and keep them from running for the hills.

The majority of states are planning to ask insurers to apply all of the additional cost from the lost reimbursements to silver plans. But some loaded them only on the silver plans sold in the ACA marketplace — those eligible for subsidies — and some are spreading it across all of the silver plans, both on and off the ACA market. In either case, these approaches keep the cost of other plans at the prices set before Trump’s announcement.

People who receive subsidies won’t pay anything extra: Because they pay only a percentage of their income toward the cost of their insurance, their contribution won’t really go up even when prices increase (the federal government makes up the difference through the subsidies it provides).

Pennsylvania, for example, set off alarm bells Monday when it said that because Trump ended the repayments, it had approved additional price increases that would average more than 20 percentage points for a market whose insurance prices were otherwise holding pretty steady. But those concerns are somewhat misplaced: Increases will be added only to subsidized marketplace plans, an actuarial sleight of hand that means the additional cost will be paid by the taxpayers at large via subsidies, not the individual enrollees.

But what about the 6.7 million people who either purchase ACA-compliant insurance outside the Obamacare marketplaces or don’t qualify for subsidies? Those buyers who live in states that aren’t planning to put the additional cost on only the Obamacare marketplaces will bear the full brunt of these double-digit price increases.

Other states, meanwhile, are planning to allow insurers to spread the extra cost across all insurance plans on both branches of the private market. In those states, people who receive subsidies still won’t see a difference in the price they pay. And those who don’t get help paying their premiums — people who buy insurance outside of the Obamacare marketplaces or earn too much for subsidies — will still end up paying more.

About a dozen states (and Washington, D.C.) currently aren’t allowing insurers to make any changes or are allowing insurers to take different approaches.

It all adds up to a bizarre and confusing marketplace. People will continue to pay very different rates by state, but some places will see much bigger across-the-board increases in the cost of private insurance. And because in many places the additional cost is being added to specific types of plans, there will be cases in which insurance covers more than the silver plans will cost less for people who don’t get subsidies. That seems likely to bring additional confusion to an already chaotic time for people who buy private insurance.