On Oct. 12, President Trump announced
he would eliminate health insurance “cost-sharing reduction” subsidies (CSRs) to
to end the payments to insurers is viewed as a major blow to the Affordable
Care Act (ACA), as it would likely raise health exchange premiums substantially
in many states. CSRs were established under the ACA to reimburse insurers for
offering lower deductibles and copayments for some consumers who buy health
plans on the insurance exchange. The payments are one of two types of ACA
subsidies that lower the cost of health care for millions of Americans; the
other type helps consumers pay for insurance premiums. Around 12 million people
received health insurance through the ACA in 2017, and some 7 million of them
had incomes that qualified them for a CSR subsidy.
In a 2014 lawsuit,
House Republicans challenged the subsidies, arguing that the payments were
illegal under the Constitution because the power of the purse belongs to
Congress, and the money to pay for the subsidies has never been appropriated.
After the Administration
announced it would stop making the cost-sharing payments, California and 17
other states sued the Administration, arguing that its decision to end
the payments was unlawful. It may take months before a final decision is
However, less than
a week after President Trump decided to end the subsidies, Senators Lamar
Alexander (R-TN) and Patty Murray (D-WA) chairman and ranking minority member
respectively of the Senate Committee on Health, Education, Labor, and Pensions
(HELP) said they had reached a preliminary framework on a bill that would
restore CSR subsidies for two years and give states more flexibility to bypass
the ACA rules on how insurance policies must be structured. The Congressional
Budget Office (CBO) found that the Bipartisan
Health Care Stabilization Act of 2017
would shrink the federal deficit by $3.8 billion over 10 years without
substantially changing the number of people with health insurance coverage..
In addition, Sen.
Orrin Hatch (R-UT) chairman of the Senate Finance Committee and Rep. Kevin
Brady (R-TX) chairman of the House Ways and Means Committee have proposed an
alternative CSR 2 year extension bill coupled with certain ACA reforms. The Hatch-Brady bill would include pro-life
protections; relief from the individual mandate from 2017-2021; relief from the
employer mandate from 2015-2017; and increase the maximum contribution limit to
Health Savings Accounts (HSA).
has been schedule for floor consideration in either House.