Trump Administration to Pay ACA Subsidies
The Trump administration says it is willing to continue paying “cost-sharing” subsidies to health insurers under the Affordable Care Act (ACA), despite the insistence by House Republicans that they are illegal because they were never authorized by Congress. These subsidies total $7 billion annually and aim to compensate insurers for reducing deductibles and other out-of-pocket costs for certain low-income consumers, who accounted for 58 percent of those signing up for plans this year. “I don’t think anybody wants to disrupt the markets more than they already are,” said Rep. Tom Cole (R-OK).
Although offering to continue paying subsidies could help stabilize insurance markets and provide some assurance to health plans deciding whether to participate in the ACA marketplace in 2018, a pending lawsuit filed by House Republicans against the Obama administration contending that the subsidies are unconstitutional continues to put a damper on the marketplace. Insurers says the uncertainty about the future of the ACA and the subsidies will force them to demand higher premiums to compensate for the risk if they stay in the market next year.