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  • Washington Highlights

    CBO Releases Report on the Effects of Terminating Payments for Cost-Sharing Reductions

    Len Marquez, Senior Director, Government Relations

    The Congressional Budget Office (CBO) August 15 released a study on the effects of terminating payments for cost-sharing reductions (CSR). The study, requested by the House Democratic Leader and the House Democratic Whip, found that gross premiums would rise by about 20 percent in 2018 if payments for the CSRs were terminated.

    Concerns about continued funding of the CSRs have been raised since the House of Representatives and the Senate failed to repeal the Affordable Care Act (ACA) in July. Following a failed vote on July 28, President Trump released a series of Tweets suggesting that he may stop payments on CSRs.

    The legality of how CSRs are funded is currently the subject of a lawsuit brought by the House of Representatives. The suit, which is currently in abeyance, was brought against the previous administration and argued that Congress would have to appropriate the funds (see Washington Highlights, August 4). The funds are currently dispersed by the Department of Health and Human Services (HHS). The Trump administration has not yet announced what it will do regarding the suit. However, in response to the President’s suggestion that he will not continue to pay the CSRs, several states and the District of Columbia requested, and were granted, permission to intervene in the lawsuit. The order, issued August 1, will make it more difficult for the administration to simply stop paying the CSRs.

    In a July 28 statement, AAMC President and CEO Darrell G. Kirch, MD, urged the continued funding of the CSRs, “Now it is more important than ever that Congress and the administration work together to improve the current system and ensure that all Americans have access to affordable, comprehensive coverage. The most immediate concern is stabilizing the health insurance market through continued, predictable funding of cost-sharing subsidies. Without these subsidies, the markets will face significant strains that could be devastating for patients, especially those who are most vulnerable.”