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You are here: Home / Anderson On Health Insurance / CSR and changing times

CSR and changing times

by | 12 Comments

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I had been an early (and at times lonely) advocate for the argument that Cost Sharing Reduction (CSR) subsidies would not be appropriated because the political and policy outcomes worked at cross-purposes of any majority much less and 60 Senator bloc that could be assembled for them. Now, it is conventional wisdom to almost everyone that there is no reason to fund CSR as almost all insurers Silver Loaded their CSR costs into premiums.

Senator Collins and Alexander have not gotten that clue and are whining that Democrats are not acting to bail them out of their own policy and political choices:

If CSR funding is appropriated here is what happens next October as rates are announced:

  • Subsidized Gold and Bronze buyers pay a whole lot more
  • Subsidized Silver buyers pay the same
  • Rates are flat or go down for non-subsidized buyers

Democrats voting for CSR funding means that they hurt people who make under 400% Federal Poverty Line (FPL) to help people who make over 400% FPL.  These headlines will be happening a few weeks before midterm elections where the probable attack by Democratic challengers on Republican incumbents is that the incumbent is shoveling money to the well-off by cutting middle class assistance programs.  Why would Democrats confuse that message by bailing out Senator Collins?

Not appropriating funding for CSR and seeing insurers roll-up that funding into Silver Loaded premiums is an acceptable outcome for Democrats. The best outcome from a Democratic perspective would be Silver Loading CSR rates with aggressive state 1332 waivers.  A stripped down Alexander-Murray bill that changes 1332 guard rails, does something smart with catastrophic coverage (current version is neither smart nor malicious) and shifts Healthcare.gov outreach funding to states could pass.  But there is no reason for Democrats at this time to support funding CSRs.

Reader Interactions

12Comments

  1. 1.

    WindyCityCat

    Are the Democrats aware of how this will play out come midterms, or are they going to get rolled into voting for this in order to get things like CHIP?

  2. 2.

    Nougat

    Slightly off topic, but is it possible that the mandate repeal today raises premiums so much that even people with 90% APTC won’t buy insurance? Why is everyone so confident that APTC will be enough to prevent a death spiral? It seems like insurers should just abandon the individual market entirely if there’s no medical underwriting allowed and no mandate.

  4. 4.

    Yarrow

    Just want to make sure that 2018 premiums and subsidies will stay the same. Whatever we signed up to pay will be what we pay, although if earnings increase I understand that could affect the subsidy and have to be sorted out at tax time.

  7. 7.

    Nougat

    @David Anderson:

    Much appreciated and looking forward to it! Most analyses I’ve read don’t seem to acknowledge in enough detail that nobody is getting the full benchmark premium subsidized and that cost-sharing reductions on the zero premium bronze plans makes them just about useless to people of lower means; at least with respect to going uncovered and declaring bankruptcy for costly procedures. But I’ll admit I’m almost certainly overlooking a lot of important points.

  8. 8.

    RinaX

    @WindyCityCat:

    Well, it’s being pushed to January because Dems won’t support it now, with Collins and Alexander whining about how it’s the Dems fault instead of their own horrible party. So I think they do.

  9. 9.

    Jeanne

    Does this mean that I, who is non-subsidized since I no longer have children to deduct and make over 400% FPL might get a subsidy at some point again? For 2018 I will be paying $955. a month premium. Brutal but must do it anyway.

  11. 11.

    Jeanne

    Thank you so much. I am self-employed so this was very helpful! Thanks for all your work here. I read all the posts and understand some. However, as a licensed professional counselor so many
    of my clients now get mental health treatment because of ACA and your posts help me facilitate that for them. Really appreciate it.

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