Trump advisers at odds over cost-sharing subsidies

Ivanka Trump is among the White House advisers who want the administration to continue the Affordable Care Act's cost-sharing reduction payments, at least in the short term. (Michael Vadon/CC BY 2.0)

White House advisers are engaged in a tug of war over the fate of the Affordable Care Act’s cost-sharing reduction (CSR) payments—likely unwelcome news for health insurers that have repeatedly lobbied for clarity about whether those subsidies will continue.

CSR payments, which the government issues to insurers so they can subsidize ACA exchange customers’ out-of-pocket costs, are a vital part of keeping already fragile marketplaces afloat. But the CSRs’ continuation is not guaranteed next year, as the Trump administration is currently charged with deciding how to handle House Republicans’ court case challenging the legality of their funding.

House Speaker Paul Ryan has said that while congressional Republicans won’t drop the lawsuit, the CSRs will continue to be funded while the case is litigated.

Rep. Tom Cole, R-Okla., was under a similar impression, telling Politico that “we’ve been told not to worry about it, it’s going to get fixed.”

Yet Trump’s advisers are still at odds over what to do about the subsidies. Steve Bannon wants to stop the CSRs, while Ivanka Trump, Jared Kushner and chief economic adviser Gary Cohn want to continue them for the time being, sources told Politico. The fate of the subsidies led to a fierce debate in the Oval Office last Friday, the article added.

Health insurance trade groups, meanwhile, are continuing to press Congress and the administration to make a definite decision on the CSRs. They’ve said they need more clarity than Ryan’s statement in order to decide whether to participate in the marketplaces next year and if so, how to price their plans, FierceHealthcare has reported.

RELATED: Insurer groups say they still need more clarity from GOP about funding for subsidies

In a letter sent Wednesday to Democratic and Republican leaders in Congress, the Alliance of Community Health Plans said the nonprofit insurers it represents estimate that premium hikes could reach as high as 20% in some areas next year if the CSRs are eliminated.

And for America’s Health Insurance Plans (AHIP), convincing the Trump administration to continue the subsidies is “priority one, two and three for us,” spokeswoman Kristine Grow told the Connecticut Mirror. 

Previously, AHIP President and CEO Marilyn Tavenner said that "if insurance companies believe cost-sharing subsidies will not continue, they are going to pull out of the market during the next logical opportunity.” 

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