The CSR payments are crucial for insurers, compensating them for covering some out-of-pocket costs for certain low-income consumers. In seven states, including Vice President Mike Pence's home state of IN, certain Medicaid recipients are required to pay premiums and contribute to health savings accounts.
The most immediate threat to the individual market, which was established under the Affordable Care Act, is the possibility that President Trump may stop making reimbursement payments, known as cost-sharing reductions or CSRs, which help insurers them keep low-income individuals covered. If Trump can't get rid of all of Obamacare, it seems like he'll settle for getting rid of the parts of it that make it work.
Trump's mere threat of ending CSR payments has already caused problems for next year's insurance market, with the head of Blue Cross Blue Shield North Carolina planning to raise premiums by 22.9 percent for 2018 primarily thanks to the uncertainty created by Trump. The Kaiser Family Foundation now projects that in 2018, only 19 counties in the country will lack an insurer offering plans on the market.
"These cost-sharing reduction payments were payments to the insurance companies in order to get them to support Obamacare in the first place", Mr. Mulvaney told CNN. The cost could be a significant stumbling block to passage since it's likely the proposal would "significantly increase the deficit", according to Matthew Fiedler, a fellow at the Brookings Instutition.
That, coupled with concern that the administration wouldn't vigorously represent the interests of states and their residents, prompted California Attorney General Xavier Becerra and New York Attorney General Eric Schneiderman in May to lead their counterparts in other jurisdictions to seek to mount their own appeal of the lower court ruling.
Trump, however, has the option to drop the appeal. However, she stayed her decision, and the Obama administration filed an appeal, which was inherited by the Trump administration this year. Insurance plans need to decide really soon what premiums they'll charge for all of 2018.
Congress needs to be under the same rules as others in the exchanges, Johnson said on a press call. "That action alone would reduce the proposed increase by at least 20% on the Silver plans". The Justice Department filed a brief defending the subsidy payments on October 24. It is the state governments that actually operate the insurance exchanges, even though they were set up under federal law, in the ACA.
House Republicans trying to thwart the ACA sued the Obama administration in federal court in Washington, arguing that the law lacked specific language appropriating the cost-sharing subsidies. Five states also offer reduced premiums or copayments for recipients who participate in wellness programs. Its two top executives (both sons of the plan's founder, C. David Molina) were abruptly ousted from the firm earlier this year. But if CSR payments were guaranteed, it would be "something like a flat increase across all plans".
The next cost-sharing payments are due to be paid in a few weeks and the president has said he'll announce this week whether he'll pay the money or keep it in the Treasury. In Arkansas, a waiver program uses federal Medicaid funds to subsidize the purchase of private insurance by recipients.
Most House Republicans opted to submit themselves and their staffs to the exemption of the law because they despised the law and played virtually no role in its inception. A bipartisan group of governors sent the White House a letter Tuesday urging the continued payments.
But Senate Health Committee Lamar Alexander said he will push for bipartisan efforts to stabilize the individual insurance markets when lawmakers return in September, as exchange customers in 20 counties across Nevada, Indiana and OH face the prospect of having no choices at all next year.