The Trump administration will issue this month’s cost-sharing reduction payments to insurers—though it has still not committed to funding them long-term.
A White House spokesman confirmed on Wednesday that the August payments will be made, the Associated Press reports. The CSR payments—which are expected to total $7 billion this year—are used by insurers to help qualifying enrollees lower their co-pays and deductibles.
The health insurance industry and policy experts have repeatedly warned that if the CSR program ends, it will significantly destabilize the individual marketplaces, leading to insurer exits and premium hikes.
Indeed, a report issued this week by the Congressional Budget Office estimated that silver-plan premiums on the Affordable Care Act exchanges would rise by 20% next year if CSR funding ends in 2018—though most consumers who qualify for premium tax credits will be shielded from that increase. In addition, such a policy would increase the federal deficit by $194 billion from 2017 through 2026.
The subsidies’ future is uncertain because a judge has ruled—in a case brought by House Republicans—that they are illegal since Congress never appropriated funding for them. An appeal of that ruling has been on hold since President Donald Trump took office, allowing the new administration to decide how to handle the case.
Further complicating matters, the appeals court recently ruled that a group of state attorneys general can intervene in the case and defend the CSR program.
While the CSR program sits in legal limbo, Trump has repeatedly threatened to end the payments, which he has characterized as a “bailout” to insurers.
Meanwhile, there are signs that Congress may take up the issue in a bipartisan effort to stabilize the ACA exchanges. Such an effort could put the CSR program on solid ground by permanently appropriating funds for the subsidies, but it faces an uphill battle. Further, a legislative solution might come too late for insurers facing tough choices about their ACA exchange participation next year.