Benefits Buzz

Negotiations Regarding Discontinued Funding for Health Insurance Subsidies

Posted on November 1st, 2017

As you may have heard, the Trump administration discontinued funding for the cost-sharing reduction subsidies (CSR subsidies). Critics of this move believe it will create instability in the Exchange and individual marketplaces. Political efforts to restore the CSR subsidies are underway, but it appears Republican leadership has some demands as part of those restoration efforts. The House Ways and Means Committee Chairman Kevin Brady (R-TX) and Senate Finance Committee Chairman Orrin Hatch (R-UT) recently announced a bicameral agreement to restore the CSR subsidies for two years if they get the following in return:
  • CSR subsidies would be funded through 2019, but double dipping would be prohibited. Some insurance carriers added a surcharge to their premiums of approximately 15 percent in anticipation that the CSR subsidies would go away. Insurance carriers who added a surcharge generally wouldn’t be eligible to receive the CSR subsidies.
  • Relief from the Employer Mandate would be provided from 2015 to 2017.
  • Relief from the Individual Mandate would be provided from 2017 to 2021.
  • Health Savings Account (HSA) contribution limits would be increased. 
The legislative text related to this announcement has not yet been made available, and that should come out within the next few days. However, it appears that many Republican leaders prefer this approach instead of a bipartisan bill that Senators Lamar Alexander (R-TN) and Patty Murray (D-WA) have been working on. 
Congress has gone round and round this year with health care proposals that would alter the Affordable Care Act (ACA), and the end result has been the same – nothing of significance has happened. It’s unclear if this most recent announcement will become law, but if the CSR subsidies are going to be restored, that needs to happen quickly.    

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