Health Groups Warn of Higher Costs if ACA Subsidies Not Financed

A coalition of eight health groups is making a direct appeal to the Trump administration and congressional leaders to fund the Affordable Care Act’s cost-sharing reductions for this year and next, calling it “the most critical action” that could be taken to stabilize health insurance exchanges.

The future of the payments has been a source of uncertainty for insurers, who are preparing their policy proposals for the ACA exchanges in 2018. Without more information about whether they would receive the payments, which help low-income people afford out-of-pocket health care expenses, insurers say it is difficult to develop premium rates.

“A critical priority is to stabilize the individual health insurance market,” the Wednesday letter to President Donald Trump, administration officials and lawmakers reads. “The window is quickly closing to properly price individual insurance products for 2018.”

Trade groups representing insurers, doctors and hospitals, as well as the U.S. Chamber of Commerce signed the letters. While insurers have long been pushing for the subsidies to be funded, the issue has received renewed attention since Republicans pulled a health care bill ahead of a floor vote last month.

The subsidies are the focus of a lawsuit brought by House Republicans against the Obama administration. A federal judge ruled for the House that the administration unconstitutionally funded the payments without a specific appropriation from Congress. The Obama administration appealed the ruling, which the Trump administration has now taken over.

The Trump administration has said it would continue to make the payments while the lawsuit is being litigated, but has not decided what to do afterward. House Speaker Paul Ryan has said the House does not plan to drop the lawsuit because it addresses the broader issue of the separation of powers.

The health groups paint a grim picture for the individual exchanges without the payments. They warn that not only would consumers have fewer choices in the individual marketplaces because fewer insurers would offer policies, but premiums would rise, potentially driving away middle-income people who don’t qualify for tax credits under the ACA. If more people are uninsured, hospitals and doctors would have to provide more uncompensated care, increasing costs for everyone.

“We urge Congress and the administration to take quick action to ensure CSRs are funded,” they say. “We are committed to working with you to deliver the short-term stability we all want and the affordable coverage and high-quality care that every American deserves. But time is short and action is needed.”