CBO: Bipartisan bill to stabilize insurance would reduce budget deficit
The bipartisan Senate bill to stabilize the individual insurance market and fund cost-sharing reduction payments to insurers would reduce the federal budget deficit by $3.8 billion from 2018 to 2027, the Congressional Budget Office reported Wednesday.
The bill, authored by Sen. Lamar Alexander (R-Tenn.), chairman of the Senate health committee, and Sen. Patty Murray (D-Wash.), senior Democrat on the committee, would fund the payments for 2018 and 2019.
President Donald Trump recently cut off funding for the payments, which insurance and other healthcare industry groups say are key to maintaining the viability of the Affordable Care Act's individual insurance marketplaces.
The White House said such payments had been found unconstitutional by a federal judge because the money had not been appropriated by Congress even though it was authorized by the ACA.
The CBO projected the CSR payments would total $18 billion for 2018 and 2019 and $99 billion from 2018 through 2027. Because the funding is already in the budget baseline, the bill extending it would not increase the deficit, the CBO and the Joint Committee on Taxation said.
Passing the Alexander-Murray bill actually would reduce the budget deficit because insurers—which have already set their 2018 premiums higher due to uncertainty about CSR funding—would have to rebate excess revenue to the government. Those rebates would total an estimated $3.1 billion from 2018 through 2027, the CBO said.
But the bill's fate is in doubt after Trump and some Republican senators insisted that any package that funded the CSRs also include conservative provisions Democrats are almost certain to reject.
Those demands include halting enforcement of the ACA's individual and employer mandates, expanding availability of deregulated short-term health plans and giving states authority to relax the ACA's insurance market rules and consumer protections, such as essential benefits requirements.
The CBO said a provision in the Alexander-Murray bill allowing sales of high-deductible copper plans to people of any age would not change the total number of Americans covered in the individual market. But it would slightly lower premiums because people seeking high-deductible coverage tend to be healthier. That would reduce federal premium subsidy outlays by $1.1 billion from 2019 through 2026.
The CBO previously found that ending CSR funding would increase the federal budget deficit by $194 billion over 10 years. That's because halting the payments would force insurers to sharply increase premiums, and that would boost federal premium subsidy spending.
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.