Funding of ACA Subsidies In Doubt

Posted April 28, 2017 by Mary McGinley

Confusion about the future of the Affordable Care Act (ACA) and what funds will be available to help lower-income Americans in paying their out of pocket healthcare expenses continues.  For the heads of health insurance companies who wanted answers on what the future may hold, there was little answer from Seema Verma, Administrator of the Centers for Medicare and Medicaid Services (CMS).

In a recent article that appeared in the Washington Post, it was confirmed by a CMS official that Verma “did not comment” on the payments to help poor Americans, referred to by those within the agency as ‘cost-sharing reductions’. This is something, according to the official, was a decision that had to be made by Congress.

These payments are federal reimbursements to insurers that help consumers to defray the cost of deductibles and co-pays. These cost reduction payments are utilized by an estimated 7 million or more Americans who purchase their healthcare through government exchanges set up in the ACA marketplace. Republicans in the House of Representatives challenged the way that these subsidies were funded in a lawsuit that dragged on for several years. A judge eventually agreed with Congress. The Obama administration appealed the decision. Within the first days of the Trump administration, the case was put on hold in the hopes that the ACA would be repealed.

President Trump has lent further confusion and uncertainty to the future of the payments by suggesting that he may withhold $10 billion in funds in next year. According to a statement made by House Speaker, Paul Ryan, those payments have not been included in the spending bill that needs to be passed by Friday, April 28th in order to avoid a government shutdown.

It may be the final solution that Republicans have been pushing for in eliminating the ACA.

Whether or not Congress ultimately decides to fund these payments are not will determine whether or not insurers will even participate in the ACA. If they do leave the marketplace or if Obamacare no longer exists because of payments being intentionally left out of the budget and simply “is gone” as President Trump suggests, insurers project that the average increase in premium prices will be at least 15%.

Republicans in Congress have made more than 60 attempts to repeal or get rid of Obamacare entirely. This may be the final step in finally bringing about its final demise.

No matter what Congress or the current administration in Washington D.C. does do with regard to the Affordable Care act, your company needs to be compliant with the law if it does continue and offer healthcare insurance options for your workers if the ACA is finally repealed.

At EinsteinHR, we know employment law and we can help your organization get ready for what is required. We have made it our business to know the requirements that can affect you and your company.

EinsteinHR will be there to help find and fulfill the human resource needs of your company. Contact us today at (770) 661-0437