Health insurers are filing rates with state insurance regulators without knowing if federal cost-sharing reduction (CSR) payments authorized under the dead and dying Affordable Care Act will be made for the 2018 plan-year. At this time, the White House has kept up with the subsidies, including the August 2017 CSR payments.
Editor’s Note: Updated October 13, 2017. See: Trump Ends Insurer “Bailouts,” Individual Plan Costs to Spike
While Congress can appropriate CSR funding in the budget, according to a Health Affairs Blog post by Timothy Jost, J.D., who specializes in healthcare law, lawmakers do not return from summer break until September 4th. Thus, states, such as Connecticut, have asked the health insurers that participate in the exchanges to submit supplemental rate filings. Anthem and ConnectiCare must file by August 30th only the silver plan rates that estimate the absence of CSR payments. Other states have asked insurers to unload the cost of lost CSR payments on all level plans, according to Jost.
Cutting Off CSR Payments
Recently, the Congressional Budget Office said that premiums would generally increase by 20 percent over 2016 rates, if the CSR payments are cut off.
The payments are authorized through the executive branch under the ACA, and they are only in place pending a legal appeal filed by the former administration. The Trump Administration can drop the appeal, renamed House v. Price, and it’s deciding whether to make the payments or not on a monthly basis.
At least 47 of counties were expecting to lose healthcare options under health insurance exchanges, but that number has been updated, according to the Kaiser Family Foundation, as insurers like Centene have agreed to offer exchange plans in several new states. Currently, all counties have at least one insurance carrier on their health exchanges.
CSR Payments & Lower Income People
While the CBO assumptions are problematic for several reasons, according to Jost, there is some credence to reports that cutting the CSR payments could benefit lower income people.
“The CBO further predicts, however, that the premium increases would be covered in large part by increased premium tax credits. Enrollees eligible for premium tax credit — people with incomes not exceeding 400 percent of the federal poverty level — would, therefore, not have to bear much of the increased cost of coverage and might in fact be able to purchase more generous coverage without additional cost,” wrote Jost.
He said it’s also possible that a loss of CSR payments would actually push the cost of silver plans higher than gold plans, which could push people to both gold and bronze plans. However,
Individuals who are not eligible for premium tax credits would flee the exchanges; assuming insurers load the full cost of CSRs onto plans in the exchange,” Jost added.
