Insurance trade group: Cost-sharing payments are hardly a 'bailout'
Trump tweeted on Wednesday evening: "Democrats are trying to bail out insurance companies from disastrous #ObamaCare, and Puerto Rico with your tax dollars. Sad!"
He continued to hammer Democrats on Thursday morning via social media. One of those three tweets asked: "What's more important? Rebuilding our military—or bailing out insurance companies? Ask the Democrats."
Democrats have pushed for Congress to appropriate funds for cost-sharing reductions, which are currently paid directly by HHS.
America's Health Insurance Plans spokeswoman Kristine Grow said Thursday, "In spite of what is being tweeted or talked about, insurers make no profits on these CSR payments. That is a misunderstanding."
She added: "It's completely incorrect to think about this, or talk about this, as a bailout."
The funds—expected to be $7 billion this year—essentially create a sliding scale of deductibles, co-pays and out-of-pocket maximums. Molina Healthcare CEO J. Mario Molina sent a letter to Congress Thursday that said the funds go directly to providers, and if any is unused, it's returned to the government.
The fate of the cost-sharing reductions, or CSRs, is in doubt because although they are guaranteed in the ACA, Congress never appropriated the money to fund them. The administration has been paying them, but a federal judge has ruled those payments were illegal. An appeal of that ruling has been on hold, and the Trump administration has not said whether it will abandon the appeal.
Trump has said if he cuts off CSRs in May, it would force Democrats to cooperate on an Obamacare replacement. Congressional Democrats began pushing to include CSR payments as part of a compromise to fund the entire federal government. Congress faces a Saturday deadline to pass a budget bill, or else there will be a partial shutdown of the federal government. Leadership expects to need Democratic votes to get a continuing resolution or budget passed.
House Majority Leader Paul Ryan (R-Wis.) said Wednesday that CSR payments would not go in the resolution, but shortly afterward, the administration said the payments would continue.
House Minority Leader Nancy Pelosi (D-Calif.) said that with that announcement, the Democrats would no longer insist on including the payments.
Grow, however, noted the Trump administration didn't make a long-term promise. All it did was walk back the president's earlier threats to cut off payments, she said.
While many insurers have said they need the CSRs in order to sell on exchanges in 2018, Dr. Molina said if the payments stopped this year, his company would send the federal government a notice of default and would seek to withdraw from marketplaces immediately. "This would result in 650,000 to 700,000 people losing insurance," he said.
A coalition that includes AHIP and other business groups, including the American Hospital Association and the U.S. Chamber of Commerce, continue to press Congress to appropriate money for this aspect of the ACA—and they're saying that only a two-year commitment will protect this group.
The coalition ran ads Thursday in publications that circulate on Capitol Hill reminding representatives that 70% of voters—and 68% of moderate-income conservatives—want the government to help low-income people with deductibles and co-pays.
If Congress appropriates the money, the House GOP lawsuit will become moot, because the core issue in the lawsuit is whether the administration can make an end run around Congress to fund CSRs.
"Without that clarity and that certainty, it will destabilize the (ACA) market," Grow said.
Reporter Shelby Livingston contributed to this story.
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.