Brief How Would Coverage, Federal Spending, and Private Premiums Change if the Federal Government Stopped Reimbursing Insurers for the ACA’s Cost-Sharing Reductions?
Linda J. Blumberg, Matthew Buettgens, Robin Wang
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The Affordable Care Act requires insurers to provide cost-sharing reductions (CSRs) that lower deductibles, co-payments, co-insurance, and out-of-pocket maximums for people eligible for nongroup market premium tax credits with incomes below 250 percent of the federal poverty level. But there is tremendous uncertainty about whether insurers will continue to be reimbursed by the federal government for these CSRs. We analyze three 2018 scenarios that could occur if federal CSR payments stop. In the first scenario, insurers have enough time before the start of the plan year to incorporate their anticipated CSR costs into a surcharge placed on silver marketplace premiums and are willing to remain in the marketplaces. In the second, insurers exit the marketplaces in response to the loss of CSRs and other policy uncertainties and changes (e.g., lack of clarity on intended enforcement of the individual mandate and the administration’s substantially reduced commitment to outreach and enrollment assistance). In the third scenario, lawmakers alter the ACA in response to the elimination of CSRs such that insurers are no longer required to pay CSRs to eligible enrollees.

Research Areas Health and health care
Tags Health insurance Federal health care reform Private insurance
Policy Centers Health Policy Center