Governors press Trump to make ObamaCare payments

Governors press Trump to make ObamaCare payments
© Greg Nash

Governors from both parties are calling on the Trump administration to fully fund key subsidies to insurers under ObamaCare.

President Trump is threatening to cancel the payments, known as cost-sharing reductions (CSRs), as he talks of how ObamaCare will “implode.”

Members of the National Governors Association, led by Virginia Gov. Terry McAuliffe (D) and Massachusetts Gov. Charlie Baker (R), on Wednesday warned ending the payments would be a mistake.

A first critical step in stabilizing the individual health insurance marketplaces is to fully fund CSRs for the remainder of calendar year 2017 through 2018,” the group said in a statement. “This is a necessary step to stabilize the individual marketplaces in the short term as Congress and the Administration address long-term reform efforts.”

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The CSR payments are crucial for insurers, compensating them for covering some out-of-pocket costs for certain low-income consumers. They total $7 billion for fiscal 2017, and regardless of whether the administration pays them, insurers would still be on the hook to offer these discounts to enrollees — they just wouldn’t be reimbursed for doing so.

Insurers across the country must decide in the next month whether to participate in the individual marketplaces and finalize their rates for 2018.

The uncertainty surrounding CSR payments is resulting in significantly higher premiums for consumers in many parts of the country and insurers exiting the marketplace altogether.

“It is critically important to provide insurers and states with certainty that CSRs will be funded,” NGA said. “Governors urge immediate action to stabilize the individual marketplace, protect consumers from rising premiums and prevent additional insurers from exiting the market.”

The White House announced in July that the subsidies to insurers would be paid, but the administration did not make a commitment beyond July.

The administration has been making these payments on a monthly basis, and insurers have been asking for long-term certainty from Congress and the administration that they’ll continue to receive the funds.