As a reminder, under the ACA, nearly six million low- and moderate-income people are eligible to receive CSR subsidies, which lower their deductibles and other health care costs. The federal government directly reimburses insurers for those costs. The Congressional Budget Office (CBO) estimates the CSR reimbursements come to nearly $7 billion a year. Individual eligibility to qualify for CSR subsidies requires a single adult have yearly income no more than 250 percent of the poverty line.
According to analysis, President Trump’s executive order expects to yield the following results:
- Insurance companies who participate in ACA exchanges will anticipate losing significant revenues due to loss of CSR payments and will likely end participation in the marketplace;
- There will be an almost immediate increase of uninsured. This is based on a Congressional Budget Office estimate that ending the CSR payments will raise the number of uninsured people by 1 million in 2018;
- Those most directly impacted will be:
- Low-to-moderate income individuals and families in the exchanges will see premiums rise dramatically – those enrolled in silver plans can expect to see a premium increase of 19% or more.
- Individuals and families that have incomes at 100-138% of poverty are unlikely to be impacted, as this population enjoys guaranteed coverage either through subsidies or through Medicaid expansion.
In addition to halting CSR payments, the Administration’s Executive Order – Promoting Healthcare Choice and Competition Across the United States – paves the way for small businesses to offer ‘bare bones” health insurance to their employees. In essence, the Executive Order will allow small businesses to purchase short-term policies for their employees, but will not have to comply with ACA mandates to cover those with pre-existing conditions.