August 17, 2017

Trump will make CSR payments this month—but next month is still an open question

Daily Briefing

    A White House spokesperson on Wednesday confirmed that the federal government will make this month's cost-sharing reduction payments to insurers, which are due Monday, but it remains unclear whether the Trump administration will make the payments in future months.

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    According to the Associated Press, the spokesperson, who spoke ahead of the official announcement and asked to remain anonymous, said "the August payment will be made."

    About the payments

    House lawmakers have successfully challenged the CSR payments in court, saying Congress never actually appropriated funding for them. President Trump has threatened to cut off the payments, though since taking office his administration has made the payments each month.

    If the administration stops making the payments, insurers still would be required to give the out-of-pocket cost discounts under the Affordable Care Act, but the federal government would not compensate insurers without an explicit appropriation from Congress. Some insurers have said they would scale back or withdraw from the exchanges without greater certainty that CSR payments will continue, and others have said the uncertainty could result in larger premium rate increases. Some insurers also have signaled they would file lawsuits if the payments are not made.

    The Congressional Budget Office and Joint Committee on Taxation on Tuesday estimated premiums for silver-level exchange plans for the 2018 coverage year would increase by about 20 percent if the administration were to step paying insurers CSRs.

    Reaction

    Senate Health, Education, Labor, & Pensions Committee Chair Lamar Alexander (R-Tenn.) praised the decision, saying it will "hel[p] 18 million Americans who buy health insurance on the individual market—songwriters, farmers, and the self-employed who don't get insurance from the government or on the job."

    He added, "Congress now should pass balanced, bipartisan, limited legislation in September that will fund [CSR] payments for 2018 as well as make section 1332 of the [ACA] work better to give states more flexibility in approving insurance policies. These two actions will help make insurance policies available at affordable prices."

    However, some conservative lawmakers continued to criticize the payments and renewed calls to repeal the ACA.

    Republican Study Committee Chair Mark Walker (R-N.C.) said, "Instead of the executive branch issuing unconstitutional payments to bail out insurance companies, the Senate should continue working until they have passed a bill to repeal and replace Obamacare," adding, "Their constituents are tired of their inability to fulfill their promise" (Mangan, CNBC, 8/16; Court, MarketWatch, 8/16; Frieden, MedPage Today, 8/16; Diamond, "Pulse," Politico, 8/17; Armour/Radnofsky, Wall Street Journal, 8/16; Alonso-Zaldivar, AP/Sacramento Bee, 8/16).

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