What is the ACA subsidy Trump is ending? Here's what it will mean for you
Holly Fletcher
What is a cost-sharing reduction?
It's a payment directly to insurers for subsidizing out-of-pocket costs, including deductibles, for people who make 100-250 percent of the federal poverty line and buy a silver plan on the exchange.
It is separate from tax credits, which offset the monthly premium for people who qualify. CSRs are being contested in a suit brought by GOP members in the U.S. House.
Some shoppers receive both a tax credit and have a CSR payment made on their behalf to the insurer by the government.
Fifty-nine percent of Tennesseans qualify for a CSR from insurers but the future of the payments could impact premiums for 70 percent of people who buy plans, according to the Sycamore Institute.In 2016, BlueCross BlueShield of Tennessee members eligible for a CSR saved $88.9 million.
Read why CSRs are in the spotlight::President Trump's decision to end ACA subsidy creates fresh uncertainty
Will the elimination of CSR payments to insurers impact my premiums in 2018?
Insurers in Tennessee requested premiums for 2018 under the scenario that CSRs would not be paid. Both BCBST and Cigna priced in a 14 percent increase to make-up for unpaid CSRs.
"The President’s decision will not impact those approved rates, and Tennessee consumers will continue to have marketplace options available for next year," said Julie Mix McPeak, insurance commissioner, in a statement. "Tennessee insurance consumers will continue to see the CSR benefit in 2018; however, the carriers will not be reimbursed for the benefit that federal law requires them to provide.”
Given the uncertainty about whether the Trump administration would make CSR payments throughout 2018 and the potential for insurers leaving Tennessee, pricing the premiums as if CSRs were not paid was inevitable, said Paul Keckley, a Nashville-based health care consultant and analyst.
The only alternative for changes to premiums at this point would be as a result of litigation by the health plans or if U.S. Centers for Medicare and Medicaid Services allows a new revision period, said a spokesman for the Tennessee Department of Commerce and Insurance.
Can insurers leave the market in Tennessee now?
At this point, insurers are committed to 2018 since they signed federal contracts on Sept. 27. BlueCross BlueShield of Tennessee will continue with its plans for 2018, said Roy Vaughn, chief communications officer.
Insurers could try to use the court system to get out of the contracts now that it's clear the federal government won't pay the CSRs — unless Congress passes legislation to enforce it.
Across the country, Keckley thinks there is a "likelihood that's what they are going to do."
Can insurers cap the number of people they take on as members during open enrollment?
Historically, there have been no caps in enrollment unless an insurer received permission from the state regulator. Community Health Alliance, a now-defunct co-op, capped its enrollment heading into 2015. It later entered voluntary runoff.
This enrollment season is "uncharted territory" given all the last-minute administrative actions from the White House, Keckley said. An insurer can't arbitrarily cap enrollment, he said, but could if it received state permission because of risk to reserves, solvency or capacity.
Should I buy a plan with everything that's going on?
Open enrollment will run Nov. 1 through Dec. 15, and insurance plans will start on Jan. 1.
Premiums in Tennessee already reflect CSRs going away and tax credits remain in place for those who qualify.
BCBST expects that because of how tax credits work, many shoppers will have at least one plan option with a premium at or near $0.
"I'd hate for people to stay away," said Dr. Mike Schatzlein, former CEO of Saint Thomas Health who is now of-counsel with Jarrard Phillips Cate & Hancock. "The policy will work for them – don’t stay off healthcare.gov because of all this noise.”
Reach Holly Fletcher at hfletcher@tennessean.com or 615-259-8287 and on Twitter @hollyfletcher.