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Safety Nets Urge Congress to Preserve CSRs in Budget

News  |  By Gregory A. Freeman  
   April 26, 2017

Denying the subsidies would push health plan costs beyond the reach of many low-income consumers, say advocates for very low-income patients.

A group of safety net organizations has sent a letter to Congressional leaders urging them to allocate funds for the cost-sharing reductions (CSRs) that they say are vital to keeping healthcare insurance affordable for the underprivileged.

The plea comes after President Trump suggested he might not continue providing the subsidies  that allow insurers to provide coverage at a low price for very low income consumers. Denying the payments would be a strategy for putting pressure on Democrats to negotiate on overhauling or repealing the Affordable Care Act (ACA), the president said.

The ACA requires insurers to reduce certain costs, such as deductibles, co-insurance, and co-payments for low-income enrollees in silver-level plans. To lessen the financial burden on insurers, the federal government then reimburses them directly through CSRs.

The Congressional Budget Office estimates that reimbursements to insurers are estimated to cost $7 billion in 2017 and are projected to top $9 billion in 2018. Democrats and others are pushing for appropriating the funds in the continuing resolution due April 28.

Failure to allocate funds for the CSRs would threaten the healthcare coverage of the approximately 5.9 million people who benefitted from CSRs in the first half of 2016, which amounts to almost 56% of Affordable Care Act marketplace enrollees, the groups say.

The subsidies averaged about $1,000 per person.

The letter was sent by America’s Essential Hospitals, the Association for Community Affiliated Plans, the Association of Clinicians for the Underserved, and the National Association of Community Health Centers.

They claim that denying the CSR payments would cause carriers to drop coverage and premiums to increase, and that federal spending would increase because the government would have to provide more tax credits to Americans for their health plan coverage.

In addition, the groups claim that uncompensated care will increase.

“Many individuals will be unable to afford coverage if premiums rise drastically, leading them to drop coverage altogether,” the letter says.

“The resulting impact is an increase in the uncompensated care burden for hospitals, community health centers, and other safety-net providers in particular. Additionally, many individuals will simply go without needed care.”

In an earlier statement, Margaret A. Murray, CEO of the Association for Community Affiliated Plans, said insurers would be hard pressed to fund coverage for low income Americans on their own.

“Few health plans could sustain unplanned expenses of such magnitude; many would be forced to exit the market if CSR payments were discontinued for an extended period of time; those that remain for Plan Year 2018 would be forced to raise their premiums substantially,” the statement says.

“This uncertainty is a toxic business environment for health insurance plans, and can prove costly to health plans and consumers alike. This issue could readily be resolved with an act of Congress. Its allowance to linger is a choice, and a puzzling one.”

Gregory A. Freeman is a contributing writer for HealthLeaders.


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