Terminating CSR Payments Would Increase Deficits, CBO Finds

On the afternoon of August 15, 2017, the Congressional Budget Office and the Joint Committee on Taxation released an analysis of the potential effects of an administration or congressional decision to terminate the Affordable Care Act’s cost-sharing reduction (CSR) payments to insurers. The CBO examined the effects on the federal budget, health insurance coverage, market stability, and premiums. The CBO projects that the primary negative effect of CSR payment termination would be an increase in the federal budget deficit, but if the CBO’s assumptions prove unwarranted, CSR payment termination could be more damaging than the CBO predicts. Background Health Affairs Blog readers are well acquainted with the underlying controversy surrounding the CSRs. The ACA requires insurers to reduce out-of-pocket limits and increase the actuarial value of benchmark silver plan insurance coverage for individuals whose household income does not exceed 250 percent of the federal poverty level (FPL). The federal government has been reimbursing insurers since this requirement went into effect in 2014. The House of Representatives filed a lawsuit late in 2014 claiming that Congress had not appropriated money to fund the CSRs and that the payments were therefore illegal. In 2016 a federal district court ruled for the House and enjoined the CSR payments. It stayed its order, however, and the Obama administration appealed the court’s ruling to the District of Columbia Circuit Court of Appeals. ...
Source: Health Affairs Blog - Category: Health Management Authors: Tags: Following the ACA Insurance and Coverage ACA premium tax credits cost-sharing reduction payments Source Type: blogs