The draft health care bill released by Senate Republicans on Thursday contains a number of differences with the House bill. One provision, a holdover from Obamacare, prompted a lawsuit from the House of Representatives in 2014. Obamacare included special subsidies to insurance companies to offset the…
The draft health care bill released by Senate Republicans on Thursday contains a number of differences with the House bill. One provision, a holdover from Obamacare, prompted a lawsuit from the House of Representatives in 2014.
Obamacare included special subsidies to insurance companies to offset the out-of-pocket costs of some consumers. Beyond the subsidies for premiums, the “cost-sharing reductions” are available for customers who fall between 100 percent and 250 percent of the poverty line—about 7 million people—to help cover co-pays and deductibles. The Senate bill would preserve CSRs.
According to the Congressional Budget Office, CSRs are projected to cost $7 billion in 2017 and increase in the future. Total expenditures over the next decade on CSRs would top $135 billion.
House Republicans have long opposed CSR payments, and have refused to appropriate funds since taking the majority in 2010. When the Obama administration paid out CSRs anyway, the House sued on the grounds that the administration does not have the power to spend money not appropriated by Congress. A federal judge agreed, but declined to halt CSR payments until after the a higher court could decide the case. The appeal before the D. C. Circuit is on hold, and the Trump administration announced in April that it would continue to pay CSRs for now.
In May, Trump cast doubts on his administration’s long-term policy on CSRs: “We’ re subsidizing it and we don’ t have to subsidize it. You know if I ever stop wanting to pay the subsidies, which I will.” In some cases, that ambiguity has already accelerated the collapse of health care exchanges as insurers move to limit their risk by raising prices or withdrawing from markets altogether.
The American Health Care Act, which the House passed in May, eliminated CSRs entirely, but the draft bill from the Senate includes appropriations for CSRs and includes back payments for “any prior obligations for such payments” through 2010. CSR payments until 2019 would cost $28 billion.
Senators Ron Johnson, Mike Lee, Rand Paul, and Ted Cruz released a statement Thursday afternoon indicating they are “not ready to vote for a bill” but are willing to negotiate until it “will accomplish the most important promise that we made to Americans: to repeal Obamacare and lower their health care costs.”
After 2019, the bill would eliminate all subsidies to insurance companies and roll back Medicaid expansion, replacing both programs with tax credits for people who can’ t afford insurance.
