Showing posts with label Frank Pallone. Show all posts
Showing posts with label Frank Pallone. Show all posts

Tuesday, March 26, 2019

Why were CSR improvements cut from Frank Pallone's ACA 2.0 bill?

There's one glaring omission in Frank Pallone's newly introduced "ACA 2.0" bill*, which sweetens ACA marketplace subsidies, funds reinsurance and advertising/outreach, fixes the family glitch and adds sundry other repairs. The new version cuts out the enhancement and extension of Cost Sharing Reduction (CSR).  The bill introduced last March would have extended 94% AV CSR to 250% FPL, and offered 87% AV CSR all the way up to 400% FPL.

In conjunction with lowering the percentage of income required to buy a benchmark silver plan  at all income levels, the CSR enhancements would radically reduce out-of-pocket costs at incomes ranging from 201-400% FPL, where ACA takeup has been poor. Why the cut?

One possibility occurs to me, though I'm not sure of the logic behind it (so it may be wrong, of course).  ACA 2.0 is a showcase bill, with no chance of passing the Senate. Improved CSR, on the other hand, may be negotiable separately -- because the Trump administration is over a barrel with respect to CSR funding.

Wednesday, February 20, 2019

Federal government's new CSR liability boosts Democrats' leverage in Congress

A word from our sponsor: subscribe, via box on right (requires email address only; you'll get 2-3 emails per week)

Good news: Democrats in Congress understand that if they're going to join with Republicans to appropriate funds to  directly reimburse health insurers for Cost Sharing Reduction (CSR), they need to extract a price. They have the leverage to demand a price -- and two federal judges increased that leverage last week in rulings that vastly increased the government's potential liability for stopping direct CSR payment.  A letter to CMS Administrator Seema Verma from Democratic Senators Patty Murray and Ron Wyden and Reps Frank Pallone and Bobby Scott flexes that leverage.

Briefly: The ACA directs the federal government to reimburse insurers for the CSR they are legally obligated to provide to marketplace enrollees with incomes below 250% of the Federal Poverty Level who select silver plans. In one of several fits of absent-mindedness, the ACA's creators neglected to make the payment part of mandatory spending, leaving it to Congress to appropriate funds. The Republican Congress did not appropriate; the Obama administration made the payments anyway; the Republican House sued to stop them; and Trump cut the payments off in October 2017. State regulators, having prepared during the long months that Trump threatened the cutoff, allowed insurers to price CSR into premiums for silver plans only, since CSR is available only with silver. Since income-adjusted premium subsidies are set against a silver benchmark, "silver loading" predictably created discounts in gold and bronze plans. That created a bounty for many subsidized enrollees with incomes too high to qualify for strong CSR -- i.e. those with incomes in the 200-400% FPL range.