Economics

Patients pay price for ending cost-sharing reduction payments

Federal cost-sharing reduction (CSR) payments, which helped lower health insurance deductibles and co-payments for millions of low-income Americans obtaining coverage in the Affordable Care Act (ACA) marketplace, will be discontinued this month, the Department of Health and Human Services (HHS) announced Oct. 12.

The move followed the White House’s statement that referred to CSRs as “unlawful payments” and a “bailout of insurance companies” that were being funded without a Congressional appropriation.

AMA President David O. Barbe, MD, MHA, said the AMA “is deeply discouraged” by the president’s decision because it “creates more uncertainty” in the individual insurance marketplace and threatens “access to meaningful health insurance coverage for millions of Americans” just as an abbreviated open-enrollment period is about to begin.

Related Coverage

Individual market endangered by uncertainty over subsidies

“Republicans and Democrats alike have expressed concern about the affordability of health care coverage under the Affordable Care Act, and bipartisan efforts have been underway in Congress to provide the specific authorization and funding for CSR payments to address the legal issues involved,” Dr. Barbe (@DBarbe_MD) said. “Our patients will ultimately pay the price. We urge Congress to accelerate its efforts to reinstate these payments before further damage is done."

It is estimated that at least 6 million people had their costs of care lowered by a CSR, at an annual cost to the federal government of around $7 billion.

The AMA joined a coalition of organizations representing family physicians, hospitals, health insurers and employers in urging Congressional leaders to "take action now to fund" CSR benefits. The joint letter notes the Congressional Budget Office's determination that ending the funding that supports CSR benefits will:

  • Drive up premiums, increasing average premiums for benchmark silver plans—the most popular plans on the exchanges—by 20 percent in 2018, and by 25 percent in 2020.
  • Deny choices for consumers and greatly increase the risk that some places will have no coverage options at all.
  • Increase the federal budget deficit by $194 billion over the next 10 years.

Create stability, not uncertainty

Four bipartisan hearings on stabilizing marketplace individual insurance premiums were convened by U.S. Senate Health, Education Labor & Pensions (HELP) Committee Chair Lamar Alexander, R-Tenn., and ranking minority member Patty Murray, D-Wash., last month. This bipartisan effort was stalled, however, as the Senate focused on the most recent iteration of an ACA repeal-and-replace bill, the Graham-Cassidy Amendment to the American Health Care Act (AHCA) of 2017.

After it became evident that the proposal lacked the necessary support for Senate passage, Dr. Barbe called on senators to continue the work they had started.

“We urge Congress to renew a bipartisan effort to address shortcomings in the Affordable Care Act,” Dr. Barbe said on Sept. 26. “In the short term, that means stabilizing the individual marketplace to achieve the goal of providing access to quality, affordable health coverage for more Americans."

Murray said the effort continues.

“I’m still working w @SenAlexander & believe we can reach a deal quickly,” Murray tweeted Friday morning. “I urge Republican leaders to do the right thing & support our work.”

Stabilizing and strengthening the individual insurance marketplace has been one of the principles for health system reform advocated for by the AMA. Others include:

  • Any proposals to replace the current law should not result in individuals currently covered losing their insurance.
  • Key insurance reforms need to be maintained such as coverage for people with pre-existing conditions and parental coverage for young adults.
  • There must be guarantees that Medicaid, the Children’s Health Insurance Program (CHIP), and other safety-net programs are adequately funded.

More on this