Trump Administration Blinks; asks for more time on appeal of Cost Sharing Reduction (CSR)

By Peter Rosenstein - May 23, 2017 12:00 am

The reality is if the Cost Sharing Reduction (CSR) payments to insurance companies under the Affordable Care Act (ACA) are discontinued it will cause chaos in the marketplaces and people will see dramatic increases in their premiums. Not something the Trump administration wants to see happen politically; so they blinked.

As Trump said “healthcare is complicated”. Monday, May 22, 2017 was the day the administration had to say whether they would continue to appeal a ruling handed down last year. The ruling came out of a suit that House Republicans filed in 2014 saying that those payments should have been funded through a congressional appropriation. Republicans estimated these payments are about $7 billion dollars a year.

In May of 2016 as reported, “a federal judge sided with the House of Representatives in a major lawsuit challenging executive branch overreach, ruling that the Obama administration has been making illegal payments to health insurance companies participating in the Affordable Care Act (ACA) exchanges. U.S. District Court Judge Rosemary Collyer found that Congress never appropriated the billions of taxpayer dollars that the administration has delivered to insurers through the ACA’s cost sharing reduction (CSR) program.” The Obama administration appealed that ruling.

When Trump won the election, House Republicans successfully asked for a delay in the case. They told the judge changes to the Affordable Care Act were likely. So today the administration had the opportunity to either ask for another 90-day delay and let the appeals process continue or end the appeal.

In the discussion leading to the Administration’s decision The Hill reported “If the White House drops its appeal in a lawsuit over ObamaCare cost-sharing reduction (CSR) payments to insurers, it could fast-track the end of the health law — something Republicans have made a major campaign promise for years.”

The problem the administration faced as they made their decision was really political and not about healthcare. They knew the Freedom Caucus in the House wants to end Obamacare under any conditions. Considering the bill passed by the House of Representatives whether or not people had healthcare never really entered the discussion.

At the same time a group of leading healthcare and business associations in a letter coordinated by the Association of American Health Insurance Plans and signed by; the American Hospital Association, American Academy of Family Physicians, American Benefits Council, American Medical Association, Blue Cross Blue Shield Association, Federation of American Hospitals and the U.S. Chamber of Commerce wrote to the Senate to “express our serious concerns about the continued uncertainty around funding for cost-sharing reduction (CSR) payments. There now is clear evidence that this uncertainty is undermining the individual insurance market for 2018 and stands to negatively impact millions of people.” They added “We urge Congress to take action now to guarantee a steady stream of CSR funding through 2018.”

This fight will now continue in the Senate and we will know whether the Trump administration’s desire to end these payments is simply political palaver. In April the New York Times reported the Department of Health and Human Services sent a written statement saying: “The precedent is that while the lawsuit is being litigated, the cost-sharing subsidies will be funded. It would be fair for you to report that there has been no policy change in the current administration.” Today’s decision then must be an indication that these payments will continue for the moment and the administration will place the blame or credit with Congress assuming they will decide what to do and whether the payments continue for all of 2018.

The problem the Senate faces with the current ACA repeal passed by the House according to Axios’s Caitlin Owens is “Complex Senate rules are adding another snag to the debate over Affordable Care Act insurer subsidies. While insurers are begging Congress to fund them, the Senate can’t just fold the subsidies as written in the ACA into its health care legislation without breaking the rules, GOP aides tell me. That’s because the Senate is trying to pass its bill through “reconciliation,” which requires every provision to have an impact on the budget. Current spending projections assume the subsidies are being paid, so simply writing a law saying “Congress approves these payments” doesn’t spend or save money. Thus, it can’t be included in reconciliation.”

So if Congress can’t agree on the current repeal bill the thinking according to Paige Winfield Cunningham in a column in the Washington Post is “It’s looking more and more likely that Senate Republicans will propose a system of insurance tax credits that are based on not just age, but also income. If that’s the direction they go, they’d be moving further away from conservative ideas for health reform and closer to the system envisioned by President Obama’s health-care law, which they’ve lambasted for years.”

What the very few rational people left in the Republican Party are concluding is it is much easier to shout from the rafters you will repeal the ACA but actually taking health insurance away from people is very hard to do.

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