President Wants ACA Cost-Sharing Payments to End

On October 12, the White House announced that it will no longer reimburse health insurance carriers for ACA’s cost-sharing reductions made available through the health insurance marketplace (exchange) for low-income individuals. The administration believes that it cannot lawfully make these cost-sharing reduction payments because Congress didn’t make appropriation for these expenses. The payments were to cease; effectively immediately. Download this bulletin for more details.

Individuals who enroll through the health insurance marketplace (exchange) during the next open enrollment period (November 1^st) could be significantly impacted. Carriers that offer plans through the exchange likely will not have enough time to make major changes before open enrollment begins. But it may cause confusion and uncertainty in the exchanges for both consumers and carriers. Note that premium tax credits will still be available and are not affected by this announcement. 

Several states have indicated that they might sue the federal government to force these subsidies to be paid. Some Congress members have said they would support a measure enacting an appropriation for these payments. But until a federal court or an appropriation is made, cost-sharing reductions won’t be paid.

In response to the President, a new bipartisan Senate proposal was unveiled by Senators Lamar Alexander and Patty Murray. The legislation would continue reimbursing insurance companies for these subsidies until 2019. Some legislators view this as a bailout for the insurance companies; others see it as a way to continue coverage for those who are ill.

President Trump called the proposal a short-term solution. The legislation also includes provisions about making it easier for individuals of any age to buy low-cost, high-deductible health plans and allowing states to revamp their insurance markets.

Support is still needed from both parties and it’s likely to face opposition in Congress. Senator Alexander predicts that some form of this legislation may pass before the end of this year.

Continue to follow our blog for late-breaking coverage.