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Analysis

Withholding CSR Funds Could Push More Health Plans Out

By Gregory A. Freeman  
   April 19, 2017

Ironically, most of that cost would be borne by the federal government in the form of higher tax credits, but the process would be messy and the resulting destabilization would not bode well for future efforts to make bipartisan changes to the ACA, Ario says.

CSR Payments Unconstitutional?

Some Republicans have challenged the CSR payments as being unconstitutional because the funds were not appropriated, but the government has set a precedent by making the payments, says Sally C. Pipes, CEO of the Health Care Policy at the Pacific Research Institute.

"It's unfortunate that they made these payments when they hadn't been appropriated because now we're in a mess," she says. "A number of insurers have said they're going to cut way back again next year as far as participating in the exchanges, and in the case of Humana they're not going to be in any exchanges. If Trump withholds the CSR payments, there probably will be even more insurers who say they are going to get out of the exchange market."

The insurers have lost so much money on the exchanges because the "young invincibles" didn't sign up in the numbers necessary to compensate for the older and sicker customers, and the cost of insuring very low income people only added to the financial burden, Pipes notes. The CSR payments at least helped some insurers keep their heads above water, she says.

Taking the payments away could push some insurers to concluding they just can't make the numbers work.

"It could lead to a faster death spiral of Obamacare," Pipes says.

Gregory A. Freeman is a contributing writer for HealthLeaders.


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