Published: Thu, May 25, 2017
National | By Rosalie Gross

Republicans seek extension for Obamacare subsidies


The president also hopes to push tax and regulatory reform through Congress, but he is adamant that can only happen after his administration successfully passes a viable replacement for Obamacare. Health insurers are in the midst of deciding whether to participate in the Affordable Care Act next year, and what to charge customers. Insurers have begun submitting their rate requests to state regulators for 2018, and uncertainty over the president's decision has already caused some companies to ask for major rate hikes this year just in case the subsidies are eventually cut off. It's been a steady slide since then: In the most recent Morning Consult poll, 45 percent of registered voters said they trust Democrats more on health care, compared with 35 percent of Republicans.

Legislation from the House proposes continuing the payments through 2019, but Trump has said that he can stop paying the subsidies at any time.

Meanwhile, the Trump administration released a report that found a doubling of average premiums for individually purchased coverage from 2013, just before Obama's statute took effect, to this year.

The request for the 90-day extension, in a filing Monday in the Court of Appeals for the District of Columbia Circuit, means that the government will continue to provide the "cost-sharing reductions" through at least much of the summer.

Senate Majority Leader Chuck Schumer said the decision to continue the funding showed the administration knew that continuing the payments was the right thing to do. In a statement issued after the court filing, he said the tactic was destabilizing the market.

The ruling was stayed pending an appeal - one the Trump administration has allowed to chug along instead of withdrawing it and cutting off the payments, which are created to cover the shortfall insurers incur by covering low-income customers' out-of-pocket costs. About 7.1 million of the 12.2 million people who signed up for ACA plans for 2017 were eligible for the extra help. It had to let a federal court know whether it would continue to defend an Obamacare subsidy program that lowers copays and deductibles for low-income enrollees - a program that Congress argues in a pending lawsuit is illegal and should be halted.

Democratic attorneys general and eight healthcare industry groups have voiced concerns in in the days leading up to Monday's deadline.

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House Minority Leader Nancy Pelosi complained the delay exacerbates "uncertainty in the health coverage of millions of Americans".

Slavitt also said that the uncertainty over the fate of so-called cost-sharing reduction payments will lead some insurers to abandon selling individual health plans altogether.

Small businesses (generally companies with 50 or fewer employees) in states that chose to do this would also be affected by the change. Through the end of fiscal year 2016, more than $13 billion in CSR payments were made to insurers, according to the IRS budget office.

In addition, the AHCA penalty, which is based on a plans premium, would likely have a greater impact on older people, whose premiums are relatively higher, and those with lower incomes, said Sara Collins, a vice president at the Commonwealth Fund, who authored an analysis of the impact of the penalties. "Unless CSRs are funded, a tremendous number of Americans will simply go without coverage and move to the ranks of the uninsured", the groups write. "Going forward, we are weighing our options and still evaluating the issues".

In contrast, under the ACA's "individual mandate", people are required to have health insurance or pay a fine equal to the greater of 2.5 percent of their income or $695 per adult.

There could be unintended consequences, as well. The premium subsidies - which are different than cost-sharing subsidies - are now closely linked to the price of coverage.

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