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Weekly Update — ObamaCare’s CSRs Explained

Posted By Administration, Tuesday, August 8, 2017

No surprise. A poll by Quinnipiac University last week says 80% of us don’t approve of how Republicans are handling the repeal and replacement of the Affordable Care Act. Of that 80%:

  60% are Republicans

  Only 32% of Republicans approve

  Just 15% overall approve

PIA National worries about the impact of the failure to repeal and replace ObamaCare on independent insurance agents who sell health insurance:

  Fortunately, most PIA members participate in the private market

  16.2% — however — engage in the ACA marketplace

  68.1% of those agencies reported a loss of 10% or more in the last three years

  Of the 68.1% all reported an increase in the services required to participate

PIA’s worries for member health insurance agents in the future are many:

  Will Congress actually do something to stabilize markets?

  Will advocates of repeal stop stabilization efforts?

  Will President Trump withdraw the cost-sharing subsidies?

By the way, the next payment is due mid-August and the president hasn’t really said which way he’s leaning. And there are many who aren’t sure how much the president actually understands about the Affordable Care Act, insurance and the cost-sharing reductions.

In a tweet on July 29th Trump said, “If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!”

The Washington Post did some fact-checking of the president’s tweet and explained to its readers that the “bailout” of insurance companies is actually the cost-sharing reduction or CSR. It helps lower the cost of insurance for people who can’t afford insurance.

The Kaiser Family Foundation’s Larry Levitt explains: “The ACA requires insurers to offer plans with reduced patient cost-sharing (e.g., deductibles and copays) to marketplace enrollees with incomes 100-250% of the poverty level. … To compensate for the added cost to insurers of the reduced cost-sharing, the federal governments makes payments directly to insurance companies. The Congressional Budget Office (CBO) estimates the cost of these payments at $7 billion in fiscal year 2017, rising to $10 billion in 2018 and $16 billion by 2027.”

Levitt says Trump doesn’t understand that.

“The government makes insurers offer lower-cost policies for which it then reimburses the insurers. This isn’t a bailout in the sense that insurers overstepped their bounds and need government support to survive. It’s a reimbursement that has been part of the ACA from the outset,” he concluded.

In other words, the idea was to help low income people afford the cost of health insurance. Or as The Washington Post says, the president does not understand. Insurance companies are not being bailed out. What they’re receiving with the CSR is money they’ve already paid to help people purchase health insurance plans.

The newspaper also says where President Obama and the Democrat-led Congress failed is in not putting language in the Affordable Care Act that the CSRs will happen automatically. Instead the language says it must be authorized by Congress. The Obama administration insisted that’s not what the language means but a judge said the language is clear. Congress will approve.

And as we know, insurers are going to raise rates or bag ObamaCare altogether if the CSR is not paid. This is the percent of enrollees benefitting from insurer payments in the PIA Western Alliance states:

  Alaska — 45% or less

  Arizona — 45.1% to 55%

  California — 45.1% to 55%

  Idaho — 60.1% to 70%

  Montana — 45.1% to 55%

  Nevada — 60.1% to 70%

  New Mexico — 45.1% to 55%

  Oregon — 45% or less

  Washington — 45% or less

 

These are the possible premium increases in the PIA Western Alliance states if the CSR payments go away:

  Alaska — 9% to 13%

  Arizona — 9% to 13%

  California — No data yet

  Idaho — No data yet

  Montana — 14% to 15%

  Nevada — 16% to 21%

  New Mexico — 16% to 21%

  Oregon — 9% to 13%

  Washington — No data yet

 

At this point, just about everyone is pushing the president to keep making the payments until some sort of solution to the ObamaCare crisis is found. First up is the National Governor’s Association. Governor Terry McAuliffe — a Democrat from Virginia — and Governor Charlie Baker — a Republican from Massachusetts — represented the nation’s governors and sent a letter to the president saying not making the payments is a mistake.

“A first critical step in stabilizing the individual health insurance marketplaces is to fully fund CSRs for the remainder of calendar year 2017 through 2018. This is a necessary step to stabilize the individual marketplaces in the short term as Congress and the Administration address long-term reform efforts,” their statement said.

Sen. Lamar Alexander of Tennessee is the chairman of the Senate Health, Education, Labor and Pensions Committee. When Congress comes back from the August recess he’s going to put together a bipartisan proposal to keep insurance markets stable. He and other moderate Republicans do not want the markets to collapse.

“We need to put out the fire in these collapsing markets wherever these markets are,” Alexander said.

Washington Democrat Sen. Patty Murray of Washington is the ranking Democrat on the committee and she’s thrilled to hear Alexander’s proposal because putting out those fires means continuing the CSR.

Efforts are underway in the House as well to salvage the CSRs.

And while Murray and other Democrats are happy with Alexander’s outreach, Sen. John Cornyn of Texas — the number-two Republican in the Senate — said it’s time for Democrats to reach out to Republicans with some plans of their own. “Democrats need to be more constructive rather than just continuing to bury their head in the sand about the fundamental problems with the Affordable Care Act,” he said.

And Cornyn’s conclusion is that the American people want everyone in Congress to participate in a solution and not just Republicans. “There's a lot the American people expect of us, but we've seen with fragile majorities in the Senate that we are forced to work together to try to solve these problems. And I think, frankly, bipartisan solutions tend to be more durable," Cornyn said.

Senate Majority Leader Mitch McConnell agrees. “If the Democrats are willing to support some real reforms rather than just an insurance company bailout, I would be willing to take a look at it,” he said.

In the meantime, former Democrat presidential hopeful and Vermont Sen. Bernie Sanders is preparing the way to introduce a bill calling for a single-payer system. His 2018 Senate campaign committee is paying six-figures for ads that are now being aired around the country.

The ads are directing people to his website to sign a petition to require the government to give Medicare to all.

 

Source links: The Washington Post — link 1, link 2, link 3, The Hill — link 1, link 2, link 3, link 4, Insurance Business America, MSN

Tags:  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News  Weekly Update — ObamaCare’s CSRs Explained 

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