Health insurers get 90-day stay in House lawsuit over cost-sharing reduction payments

Donald Trump speaking
A federal appeals court approved the Trump administration's request for a 90-day delay in the House v. Price lawsuit on Monday.

A federal appeals court has granted the Trump administration a 90-day delay in a lawsuit over cost-sharing reduction (CSR) payments. House v. Price, brought originally by House Republicans against the Obama administration, argues that Congress never appropriated funding for CSRs, so the payments are unconstitutional. 

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Payer organizations expressed relief at the short-term stay, but still worry about what will happen three months from now—and beyond.

The government pays CSRs to insurance companies so they can subsidize the out-of-pocket healthcare costs of low-income Affordable Care Act exchange customers. These subsidies—estimated at $7 billion this year—have been at the center of a lawsuit in which House Republicans claimed Congress never appropriated the money to fund them.

The delay means payers will continue to receive the payments for now. But Trump has reportedly told aides he wants to cut off ACA subsidy payments to health insurers who sell plans on the exchanges, a move that could put the health insurance exchanges into a tailspin.

“We are pleased that … at least for the time being [that] cost-sharing reductions will continue, albeit through a 90-day stay,” Margaret A. Murray, CEO of the Association for Community Affiliated Plans, said in a statement. But insurers are still receiving conflicting signals about the fate of the CSR payments for 2017 and 2018, she noted.

Insurers are preparing to file plans for health insurance exchange offerings in the coming days and weeks.

“This uncertainty is destabilizing the market and leading health plans to raise their rates for 2018 to account for the political risk brought on by [the] protracted debate over the fate of these reimbursements,” Murray said. “Continuing uncertainty will lead to higher premiums, lower competition and fewer choices for consumers.”

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Several organizations, including America’s Health Insurance Plans (AHIP), the Blue Cross Blue Shield Association and the American Hospital Association, wrote a letter (PDF) to Congressional leaders expressing “serious concerns about the continued uncertainty around funding for [CSR] payments,” adding there’s “clear evidence that this uncertainty is undermining the individual insurance market for 2018 and stands to negatively impact millions of people.”

Under ACA, insurers must keep paying even if federal funding stops. But they could also follow the lead of other insurers who have already pulled out of the insurance markets. 

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“Simply put, continued uncertainty, particularly the lack of clarity around CSR payments, has led several insurers to conclude that they cannot participate for 2018,” according to the letter. “Those who will participate are responding to the market uncertainty with premium requests that are as much as 60% higher than last year.”