Restore subsidies for working Americans

Despite ongoing bipartisan efforts currently underway in Congress to address comprehensive health care reform, President Trump announced last week that he will stop making cost reduction payments to health insurers under The Affordable Care Act (ACA). The effect of this action has profound consequence for millions of Americans

What are the ACA Subsidies?

The ACA provides two kinds of subsidies to help low- and middle-income people pay for insurance on the exchanges. Premium subsidies defray the cost of premiums for people making less than four times the poverty level. For those who make less than that, cost-sharing reductions (CSR’s) help cover the costs of deductibles and other out-of-pocket spending.  CSR’s currently cover individuals who make between 100 and 250 percent of the poverty line. This year, CSR’s have amounted to about $7 billion.

Although they serve similar goals, the two subsidies function in different ways. The premium subsidies are refundable tax credits that go to individuals: They are administered through the tax code. For CSR’s, the ACA requires insurers to cut their lowest-income customers a break on their out-of-pocket spending. In turn, the statute says the federal government will, reimburse insurers for doing so.

Some years back, the House of Representatives sued the Obama administration for continuing to make the cost-sharing payments in the absence of an appropriation by Congress. Currently the ACA links the premium subsidies to an existing appropriation, but not necessarily CSR’s. It is under this legal pretext that the Trump administration is trying to justify termination of the payments.

So what happens now?

Most agree immediate lawsuits will emerge to keep the cost-sharing payments flowing. In addition, it is estimated that thousands of Americans will see an immediate and drastic increase in health premiums, and healthcare markets are likely to experience rapid turmoil. Both the litigation and the higher premiums will likely cost taxpayers millions.

CALL TO ACTION

  • Contact Members of Congress to request congressional action to immediately restore CSR payments under the ACA. Ask MOC’s to participate in ongoing efforts to address bipartisan health care reform for all Americans. Although the House of Representatives is on recess this week, their staff are still in their offices and the Senate is still in session.
  • Bonus action: Sign this NextGen letter to insurers asking them to stay in insurance marketplaces and keep prices low to keep health care stable in the wake of Trump’s executive order.

Sen. Orrin Hatch (202) 224-5251 (DC) // (801) 524-4380 (SLC) // (801) 375-7881 (Provo) // (435) 634-1795 (St. George) // (801) 625-5672 (Ogden) // (435) 586-8435 (Cedar City)
Sen. Mike Lee 202-224-5444 (DC) // 801-524-5933 (SLC) // 435-628-5514 (St. George) // 801-392-9633 (Ogden)
Rep. Rob Bishop
 (Congressional District 1): 202-225-0453 (DC) // 801-625-0107 (Ogden)
Rep. Chris Stewart (Congressional District 2): 202-225-9730 (DC) // 801-364-5550 (SLC) // 435-627-1500 (St. George)
Rep. Mia Love (Congressional District 4): (202) 225-3011 (DC) // 801-996-8729 (West Jordan)

Not sure who your U.S. Representative is? Check here.

Information from The Incidental Economist

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