Last August, I thought that the reality of Cost Sharing Reduction (CSR) termination would make the politics of the ACA wierd.
Republicans would be the ones who would want/need to explicitly appropriate CSR funding.
Democrats have no reason to trade CSR funding for policies that they don’t prefer. Inaction gives them an incredible policy victory. Conservatives are the ones who need to make concessions to fully fund CSR…
Liberals will have achieved an incredible policy victory in the states that force insurers to load the cost of CSR onto only Silver plans. In these states, the benchmark plans will be sufficient to buy 90% actuarial value coverage. That is better than Medicare. That is an incredible improvement over the ACA as plans will become more affordable to many more people as premiums and deductibles will decrease and the risk pool will get healthier as the value proposition gets better.
Susannah Luhti at Modern Healthcare reports on a bill in the House:
Rep. Ryan Costello (R-Pa.) of the Energy & Commerce Committee said committee leadership wants to mark up his market stabilization bill — introduced last month — so it can potentially ride with the omnibus spending package expected in February….
The Costello bill, co-sponsored as of Thursday by the fourth-highest House Republican, Rep. Cathy McMorris Rodgers of Washington, would fund CSRs for 2017, 2019 and 2020….
The reinsurance portion of the bill would appropriate $30 billion over three years for state high risk pools — another idea insurers are excited about.
The Costello bill would have the political effect of creating great headlines for Republicans two weeks before the mid-terms as final prices were announced for the 2019 Open Enrollment. Funding CSR and then throwing $10 billion in reinsurance at the individual market would lead to 20% or more premium drops even after accounting for normal medical trend and the added costs of the lack of an individual mandate.
On a policy level, lower premiums primarily benefit the federal government and non-subsidized buyers. Fully funding CSR means no more Silver-loading. Compared to current pricing patterns, no Silver Loading harms subsidized buyers, especially buyers who earn between 200% and 400% Federal Poverty Level. A lot of subsidized buyers will be whip-sawed in this scenario.
I think there is a stabilization and technical corrections bill that can move forward. It could contain significant reinsurance funding as well as tweaks to 1332 waiver guidelines and outreach funding. I do not think that there is an agreement zone for a bill that funds CSR going forward. On the narrowest grounds, I could see an agreement to fund CSR through 12/31/17 retroactively to avoid lawsuits but that is about it.
The politics of CSR are getting weird.