The Effects of Ending the Affordable Care Acts Cost-Sharing

[turbinetree]

Controversy has emerged recently over federal payments to insurers under the Affordable Care Act (ACA) related to cost-sharing reductions for low-income enrollees in the ACA’s marketplaces.

The ACA requires insurers to offer plans with reduced patient cost-sharing (e.g., deductibles and copays) to marketplace enrollees with incomes 100-250% of the poverty level. The reduced cost-sharing is only available in silver-level plans, and the premiums are the same as standard silver plans.

To compensate for the added cost to insurers of the reduced cost-sharing, the federal governments makes payments directly to insurance companies. The Congressional Budget Office (CBO) estimates the cost of these payments at $7 billion in fiscal year 2017, rising to $10 billion in 2018 and $16 billion by 2027.

The U.S. House of Representatives sued the Secretary of the U.S. Department of Health and Human Services under the Obama Administration, challenging the legality of making the cost-sharing reduction (CSR) payments without an explicit appropriation. A district court judge has ruled in favor of the House, but the ruling was appealed by the Secretary and the payments were permitted to continue pending the appeal. The case is currently in abeyance, with status reports required every three months, starting May 22, 2017.

https://www.kff.org/health-reform/


And today Friday 14th the country got information on how a psychopathic sexual predator will kill people because he wanted to hand a pen to RAND PAUL and have other sociopaths standing around clapping contemptible hypocrites

[Gothmog]

1. What happens if the House wins its ACA lawsuit

These cost sharing payments will still be owed and the insurance companies can simply sue in federal court for these payments and the insurance companies will win these lawsuits https://theincidentaleconomist.com/wordpress/what-happens-if-the-house-wins-its-aca-lawsuit/

What if the Treasury Secretary can’t make those payments? Well, health plans would still have to adhere to the rules about reducing their customers’ cost-sharing. The 5.9 million people who get cost-sharing reductions would thus get to keep them. Health plans just wouldn’t get reimbursed.

Or would they? Even without an appropriation, health plans still have a statutory entitlement to cost-sharing payments. What that means in non-legalese is that Congress has promised to pay them money—whether or not there’s an appropriation. And health plans can sue the government in the Court of Federal Claims to make good on that promise. (Congress has undeniably appropriated the money to pay court judgments.)

So the question isn’t whether the government will pay the cost-sharing reductions. It’s when. If the government is right, Treasury can pay health plans on a “periodic and timely” basis. If the House is right, health plans have to file thousands upon thousands of duplicative lawsuits to get the money.

That’d be bonkers, of course. Forcing health plans to pursue expensive and time-consuming litigation to recover what they’re owed doesn’t help anyone. The plans will just pass on the costs of the litigation, delay, and uncertainty to their customers. That’s why, if push comes to shove, I suspect that Congress will appropriate the money it’s supposed to pay. After all, there’s a longstanding convention that Congress honors its debts.

[Gothmog]

2. Cost-sharing reduction payments are not dead

The insurers will simply have to sue for these payments http://thehill.com/opinion/healthcare/356510-cost-sharing-reduction-payments-are-now-dead

There is no question of the federal government’s obligation to make the payments. The insurers are required to provide a discount to certain customers identified by law, and the federal government is committed to reimbursing the insurer for these discounts. It is no more a “bailout” of insurers than it is a bailout of credit card companies when you pay your monthly bill to reimburse the bank for money it has paid on your behalf.

Rather, the dispute over the CSR payments is limited to whether or not there is currently an appropriation available to pay them. The House of Representatives has argued in court that a particular permanent appropriation is not available to make CSR payments. The House won in the district court and the case is now on appeal.

Ultimately, the outcome of that case may not matter. Trump's attempt to cancel the CSR payments may not matter because as legal experts have pointed out, there is already an appropriation of money set aside to pay the federal government's obligations: the Judgment Fund.

The Judgment Fund is a permanent, indefinite appropriation available to pay final money judgments and awards against the United States provided for by law. No one has sued the government over the CSR payments yet, but if the insurers chose to do so, they would win. The Affordable Care Act requires them to make premium reductions and obligates the government to reimburse them, and if the president refuses to do so, they would simply recover from the Judgment Fund.

As a result, the only impact on the insurers of the Trump administration not making the CSR payments is the headache and additional cost to the federal government of litigation. In fact, some have suggested that states that want to stabilize their individual health insurance exchanges could make the CSR payments to the insurers themselves, and then sue to recover from the federal government on a subrogation theory, cutting the insurers out of the problem and eliminating any uncertainty for them.

Taking this a step further, even if Congress and the White House tried to change the terms of the Judgment Fund to exclude this kind of payment, they would run into Constitutional barriers. The insurers already have relied to their detriment on the government’s commitment to reimburse them for legally-mandated cost reductions, and so the insurers have an ultimate backstop in the Constitution’s Takings Clause, which provides that private property will not “be taken for public use, without just compensation.”