According to multiple media reports, the Trump administration will make CSR payments for August. President Trump has previously called these expenditures, which help insurers fund coverage for low income individuals, “bailouts” for insurance companies. These payments have been the subject of litigation over whether this reimbursement to insurers was legal, as Congress had not explicitly appropriated funding for this purpose. Senator Lamar Alexander (R-TN), chairman of the Senate Health, Education, Labor, and Pensions Committee, has urged the administration to continue making CSR payments, suggesting that Congress should legislatively appropriate the money at least through 2018, and “probably should go ahead and do it through 2019. ”
On August 15, at the request of House Democratic Leader Nancy Pelosi (D-CA) and House Democratic Whip Steny Hoyer (D-MD), the Congressional Budget Office (CBO) released an analysis of the impact of ending CSR payments, effective January 1, 2018. Under this scenario, the CBO estimates that insurance premiums for Affordable Care Act (ACA) “silver” plans would increase 20 percent in 2018, and the deficit would increase by $194 billion over 10 years.
Over the August recess, Senators Lindsey Graham (R-SC), Bill Cassidy (R-LA), and Dean Heller (R-NV) have been working to build support for their health care proposal to repeal and replace the ACA. Their proposal would replace premium tax credits, CSR payments, and enhanced Medicaid expansion funding by 2020 with block grants to the states to use for health care purposes, and would include per capita caps – with a block grant alternative – for Medicaid. States could use block grants for: high-risk pools; reinsurance to stabilize premiums in the private individual market; direct payments to health care providers; assistance to reduce deductibles, cost-sharing, and out-of-pocket costs; assistance to help individuals buy non-group coverage; and private insurance for individuals eligible for Medicaid, up to certain limits. The Graham-Cassidy-Heller proposal would also repeal a number of the ACA taxes, defund Planned Parenthood for a year, establish association health plans for small businesses and self-employed individuals, as well as retain the ACA requirements that health insurance cover preexisting conditions and provide dependent coverage for children up to age 26.
As Senator Cassidy described in an op-ed, their proposal is focused on “returning power and flexibility to the states” and would “[l]et a blue state do a blue thing and a red state such as mine take a different, conservative approach. ” The Senators hope to have at least 25 governors support their approach by the end of this month and have been working to complete the specific formula by which each state will receive funding, based on a number of factors including the size of its eligible population and the cost of care. Senator Graham has noted that if a group of governors and President Trump support their block grant approach, “it would be impossible for the Republican leadership not to take this idea up. ”
The text of the most recent version of the Cassidy-Graham-Heller proposal appears here, on pages S4541-4555.
