CBO: With no CSRs, premiums increase 20%
- Eliminating cost-sharing reduction (CSR) payments to insurers would cause premiums to increase by 20% next year and cause more people to have no exchange plan options, according to a Congressional Budget Office report released Tuesday.
- That scenario would also mean a $194 billion increase to the federal deficit in the next 10 years, largely because of increased subsidies the higher premiums would require.
- Meanwhile, Centene is once again stepping up to make sure people will have at least one choice in their exchange market. With Centene covering 14 rural counties in Nevada, there are now only two counties (one in Ohio and one in Wisconsin) at risk of having no payer in the market.
The CSRs are still in question, much to the dismay of payers. Participation in next year’s exchange markets is looking better this week, especially with Centene's latest announcement. Early premium rate filings, though, show that the possibility of CSRs going unpaid is already increasing premiums for exchange plans.
President Donald Trump’s administration has so far continued the monthly payments, but insurers are looking for a solid commitment of future payments for the White House. Or, in lieu of that, congressional action to ensure the payments are made.
Trump has said he is considering ending the payments in an effort to sabotage the Affordable Care Act (ACA) and force negotiation on a repeal and/or replacement bill. Congress is currently in the middle of its summer break but a few lawmakers are discussing potential bipartisan legislation that continued the funding.
The effect Trump would be hoping for if CSRs are stopped is a death spiral in the ACA exchange marketplace. That hasn't happened with the threat alone, but insurers have warned that could be a result if the payments are halted. According to the CBO report, however, the market could remain stable without CSRs under certain conditions.
The report says that assuming continued enforcement of the individual mandate and no change to the medical loss ratio, "are anticipated to cause sufficient demand for insurance by enough people, including people with low healthcare expenditures, for the market to be stable in most areas as the ACA is currently being implemented." This statement also makes the assumption people receiving the increased subsidies would continue to buy silver level plans, and that most state insurance commissioners would allow payer to increase premiums for silver plans but not bronze or gold plans.
Key point. CBO assumes insurance regulators correctly direct insurers to only raise silver plan premiums, as opposed to across all plans. https://t.co/nXBmN38ZFq— Edwin Park (@EdwinCBPP) August 15, 2017
- Congressional Budget Office The Effects of Terminating Payments for Cost-Sharing Reductions
- The Nevada Independent Centene will cover Nevada's rural counties on Obamacare exchange
- Healthcare Dive Uncertainty influences early premium rate filings for ACA exchange plans
- Healthcare Dive Why ACA market upheaval still looms large despite failure to repeal the law
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