The Trump administration is discontinuing cost-sharing reduction payments to health insurance companies, according to a statement released by HHS Acting Secretary Eric Hargan and CMS Administrator Seema Verma.
Here are six key points:
1. The ACA created the subsidies to expand coverage to low-income Americans on the exchanges by paying insurers for covering this cohort. The Congressional Budget Office said these payments totaled an estimated $7 billion this year, according to CBS News.
2. The Trump administration based their decision on Attorney General Jefferson Sessions's legal opinion. The statement said, "After a thorough legal review by HHS, Treasury, OMB, and an opinion from the Attorney General, we believe that the last Administration overstepped the legal boundaries drawn by our Constitution. Congress has not appropriated money for CSRs, and we will discontinue these payments immediately."
3. Some Republican leaders are concerned the move will result in more uninsured Americans in their respective districts. The New York Times reports Rep. Ileana Ros-Lehtinen, R-Fla., said President Donald Trump's decision will not fulfill promises to make coverage more available and affordable.
4. Party members on board with the decision include Speaker Paul Ryan, R-Wis., who said the Obama administration bypassed Congressional authority through the subsidies.
5. It is unclear how insurance companies will move forward following this decision as many penned contracts to participate in the 2018 exchanges, according to CNN. Many increased their rates to offset the high costs of insuring Americans on the exchanges.
6. New York Attorney General Eric Schneiderman and California Attorney General Xavier Becerra both said they plan to take legal action against the Trump administration, according to Providers plan to increase telehealth use — 5 insights