One hundred and eighty-seven House Democrats signed a strongly worded letter to President Trump reminding him of his obligation to continue paying the cost-sharing reduction (CSR) subsidies provided under sections 1401 and 1402 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) as long as the ACA remains law.
The House Democrats wrote: "The ACA is not dead; however, your failure to commit to paying these subsidies is destabilizing the Marketplaces, and will directly result in higher costs and fewer consumer choices. It is your responsibility to the American people and your obligation under the law to make the cost-sharing payments and to stop other acts of sabotage that undermine Americans' access to affordable, quality health insurance."
In support of their belief that failure to pay the CSRs will result in destabilization of the Marketplaces, higher premium costs, and fewer consumer choices, the letter from House Democrats offered the following:
- A December 7, 2016 letter to House Speaker Paul Ryan, from the American Academy of Actuaries stating that "eliminating the reimbursements to insurers for cost-sharing reduction (CSR) subsidies could result in insurer losses and solvency challenges, leading insurers to further consider withdrawing from the market. In either case, significant market disruption could result, leading to millions of Americans losing their health insurance."
- Dr. Mario Molina, the CEO of Molina Healthcare recently stated that if CSR obligations are not funded, the company will withdraw from the Marketplaces immediately. As reported by Yahoo Finance, Molina recently told CNBC’s "Closing Bell": "funding CSRs…is imperative for the market and individual insurance. They need to fund the CSRs for the next two years to buy Congress the time to come up with some reform legislation…if they don't do that, the individual market collapses, and that would be terrible for the country. It would be terrible for people buying individual insurance, and it would be a black eye for the Republicans."
- A Kaiser Family Foundation study concluded that the average ACA Marketplace premium for a silver plan would need to increase by 19 percent to compensate for the lack of CSR subsidies.
- An analysis by Covered California found that 2018 premiums in the individual market could rise by 42 to 49 percent if the CSRs are not funded and other provisions of the ACA are not enforced.
While the Trump Administration has made the CSR payments for May 2017, it has yet to commit to future payments. President Trump’s public statements that "The best thing politically is to let Obamacare explode" and "Obamacare is dead" have raised the concerns of House Democrats that future payments will be made.
Companies: Kaiser Family Foundation; Covered California; American Academy of Actuaries
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