CSR Loss, Rising Employment May Hurt Health Plans

Gregory A. Freeman, September 13, 2017

The loss of cost sharing reductions could force health plans to raise premiums so much that silver plan customers opt instead for bronze.

Governors from five states are calling on President Donald Trump to continue the cost sharing reductions (CSRs) to help stabilize the health insurance market, while analysts are determining how the loss of the subsidies would affect the market.

One expected result: Health plans will suffer more if the individual mandate is not enforced.

Losing the subsidies would exacerbate existing challenges to health plans by pushing some consumers to buy down to bronze plans, one analyst says, and the problems for health plans worsen if the government stops enforcing the individual mandate.

On top of that, higher employment could further reduce the population of the individual market.

Governor Bill Haslam (R-TN) told the Senate Health, Education, Labor and Pensions Committee recently that he and other governors have not given up on the idea of saving the current insurance structure.

But the subsidies are necessary to keep the insurance market stable, especially if wider reform is not coming any time soon.

"Some may say the only way to ensure legislative action on cost and realize real reform is total collapse," Haslam said.

"I don't subscribe to that line of thinking. I think every governor here and those back at home believe we can move to stabilize the market now while we work to take on the issue of health care costs."

Waiting for the White House

Insurers must file their 2018 rates by Sept. 20, and the Trump administration has not committed to any long term continuation of the CSRS, which help health plans offer lower cost coverage to low income consumers.

Gregory A. Freeman

Gregory A. Freeman is a contributing writer.

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