Humana sues Trump administration over ACA cost-sharing reduction payments

Affordable Care Act
Humana has filed suit against the Trump administration over CSRs. (Getty/zimmytws)

Humana has filed suit against the Trump administration, seeking financial damages it claims were lost when Affordable Care Act cost-sharing reduction payments were eliminated in late 2017.

The insurer said in the lawsuit that it agreed to participate in the exchanges in 2017 with the understanding that CSRs would be paid. When the Department of Health and Human Services nixed the payments in October, Humana was locked in to the premiums and footprint of its exchange plans.

As such, insurance industry groups warned that eliminating the payments would have significant financial impacts on payers.

"Humana is not immune to these harms, and in fact has already suffered, and will continue to suffer, their effects," according to the lawsuit.

RELATED: Humana files suit against generic drug makers, alleges price fixing

CSR payments, which some on the right decried as a "bailout" for insurers, are subsidies that make it easier for low-income people to pay for ACA-compliant payments.

Insurers argued that if the payments were eliminated, they would be forced to raise premiums or exit the exchanges as a result. These "effects are currently playing out in every major ACA exchange across the country," Humana said in the lawsuit.

Humana estimates that it is nearly $2 million in unpaid CSR payments from October, November and December 2017.

"Like other QHP issuers, Humana is still required by law to provide cost-sharing reductions to eligible insureds, despite not receiving the mandated reimbursement from the government. This has caused Humana to suffer large financial losses," the insurer said. "It also leads to instability in the insurance markets and hinders Humana’s ability to design and price plans effectively for the ACA exchanges."

Other insurers have previously sued to recover the payments.

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