Cost Sharing Reductions Remain in Jeopardy

Cost sharing reductions (CSRs) are subsidies offered by health plans under the ACA to consumers who have a household income below 250% of the poverty line, including 70,000 Washington residents. CSRs help to limit deductibles, co-insurance and co-payments for low-income enrollees. Insurance companies pay these costs and are currently reimbursed by the federal government. But in 2014, the House of Representatives brought a lawsuit claiming that Congress did not actually appropriate the money to reimburse the insurance companies for the CSRs. In May 2016, a lower court judge ruled in favor of the House but did not allow the decision to go into effect pending appeal. The Obama administration did appeal, defending its practice of making the reimbursements. While awaiting the decision, the federal government has continued to pay, however, the Trump administration hasn’t decided whether they will continue to defend this position. If they don’t pursue the appeal or fund CSRs, insurers will still have to offer plans with reduced cost-sharing and come up with the money by raising premiums for everyone by an anticipated 19%, or just drop out of the insurance market.

Comments are closed.