Health

Jon Huffman is an actor, and doesn’t have health insurance through an employer. For the past few years, he’s bought his coverage on Healthcare.gov – and before that Kynect.

And he’s one of the millions of Americans that could ultimately be affected by President Donald Trump’s announcement Thursday that he’ll end the federal government’s payments to insurance companies to subsidize health coverage for some low- and middle-income people.

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When the Affordable Care Act was passed in 2010, it was just in time for 62-year-old Huffman. He’d once had insurance through an actor’s union, but didn’t use it when he was young and healthy. But in 2013, he started feeling a sharp pain in his stomach. He held off on going to the doctor, but in 2014 finally got insurance through Kynect and saw a professional.

Courtesy Jon Huffman

Jon Huffman

“Then two months later, I was diagnosed with stage 3 colon cancer,” Huffman said. “[The insurance coverage] came just in the nick of time for me.”

One of the reasons Huffman can afford this health coverage is because of a subsidy. When he files his taxes every year, he gets money back to help him pay for his insurance. Huffman qualifies because his income is less $48,240 a year.

But in addition to these direct subsidies for people like Huffman, the federal government also gives insurance companies a chunk of money to help cover the cost of insuring people who make less than about $30,000 a year.

This money paid to the insurance companies brings down the amount enrollees have to pay every time they go to the doctor – called a copay – and the limit they have to reach before insurance kicks in – called a deductible.

And these insurance payments – called cost-sharing reductions – are what Trump is taking away. In early 2016, almost 43 percent of Kentuckians who got insurance through the federal marketplace had their deductibles and copays lowered due to the CSRs paid by the government.

Cost-Sharing Reductions

Trump has talked about stopping CSR payments for months; so much so that insurance companies factored in the loss of CSRs when they filed 2018 Healthcare.gov rate increases this summer.

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Caresource, one of the two insurers left in Kentucky, initially asked the state to increase enrollees’ premiums by almost 20 percent for 2018. But they withdrew that request once it seemed likely the CSR payments would end. Now, the company plans to increase premiums by 56 percent next year.

For Huffman, the effect of all this will likely be a wash. While his monthly payment of $280 will likely increase, the federal government will have to give him a larger tax subsidy to compensate.

The people it’ll really affect will be those that don’t qualify for a subsidy because they earn too much. For a family of four, that income limit is around $98,000. For these people, monthly premiums can cost thousands of dollars.

Market Collapse

Health policy experts say eliminating the CSRs will likely lead to the people without direct subsidies leaving Healthcare.gov. They could find coverage with association health plans that are cheaper but offer skimpy benefits. On Thursday, just a few hours before the announcement on CSRs, President Trump directed the federal government to find a way to create these plans.

If this happens, there would be fewer people getting insurance through the exchanges. This would mean fewer people paying those increased premiums to insurers, which could lead insurance companies to leave the market altogether. This could collapse the individual market.

This scares Jon Huffman. Colon cancer is aggressive and spreads fast. Every six months he has to go back to get checked that it’s still gone.

“All the treatment, the subsequent check-ups, is expensive,” he said. “There’s no way I could have afforded it without the [Affordable Care Act].”

But if the market altogether went away? That’d be another scenario for Huffman.

“I could lose [insurance] and not have it next year,” he said. “And if I don’t, I probably won’t get another colonoscopy. I probably wait til’ I can get Medicare before I can get more health care and keep my fingers crossed.”

But the end of CSRs isn’t likely to happen by January 1, when insurance companies’ new rates go into effect. These CSR payments are actually required in the Affordable Care Act. Several states, including Kentucky, have already said they plan to file lawsuits. That would mean years in court to determine the future of the individual market created by the Affordable Care Act.

Lisa Gillespie is WFPL's Health and Innovation Reporter.