Congress Reaches Tentative Deal on ACA Cost-Sharing Reduction Payments

November 7, 2017
Posted in ACA 101
November 7, 2017 LI Advantage

Congress Reaches Tentative Deal on ACA Cost-Sharing Reduction Payments

President Donald Trump announced via executive order on Oct. 12 that he was ending payments to insurers for subsidizing low-income market participants, saying the payments are illegal because Congress hasn’t appropriated the money. These so-called cost-sharing reduction (CSR) payments, which subsidized health plans purchased on the ACA’s Marketplace exchanges, are sometimes called “extra savings” and are distinct from the premium tax credits that also subsidize policies purchased through an exchange.

Trump’s executive order does not affect the penalties that large employers are subject to when a full-time employee is not offered ACA-compliant coverage and receives a premium tax credit for a policy purchased through a Marketplace exchange.

Shortly after the executive order was issued, a bipartisan agreement was brokered on the Senate Health, Education, Labor and Pensions Committee by Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash. The agreement, if passed by Congress in new legislation, would restore CSR payments to insurance companies for two years and would give states more flexibility from ACA regulations.

Trump and some GOP congress members have indicated that they want any legislative fix to allow for a wider range of plans to be made available under the ACA, among other changes that might sink the deal if Democrats remain opposed.

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