According to a new report from the Kaiser Family Foundation, eliminating cost sharing reductions (CSRs), or subsidies that lower the out-of-pocket costs for moderate-income consumers, would increase overall costs to federal government instead of saving money.
Nationally, CSRs are worth approximately $7 billion annually and reduce out-of-pocket costs for moderate income consumers by $3,350 to $3,600 per year.
CSRs are especially important for New York because CSRs provide nearly $1 billion annually in funding for the Essential Plan, the State’s Basic Health Program, which covers nearly 700,000 New Yorkers.
Continued funding for CSRs is at risk. In 2016, members of the House of Representatives sued the Administration to block funding for CSRs and argued that the Administration had paid for them without Congressional authority. A district court ruled in favor of the House, and the case is now on appeal. The current Administration now has to decide whether or not to move forward with the appeal. If the appeal is dropped, and Congress does not appropriate the CSR funding, millions of consumers may no longer be able to afford coverage.
Although it would appear that eliminating CSRs would save the federal government money, the Kaiser Family Foundation explains that any savings would be coupled with significant increases in costs for the Advanced Premium Tax Credits (APTCs) that lower monthly premiums. The report estimates that ending CSRs would actually result in a net increase in federal costs of $2.3 billion.
Follow up from blog posted February 21, 2017
Yesterday afternoon, the Centers for Medicare and Medicaid Services (CMS) issued a final rule claiming to stabilize the Affordable Care Act insurance markets. In fact, it does just the opposite.
HCFANY and thousands of other consumer and provider groups submitted comments in opposition to the proposed version of the rule because many of its provisions would have harmed consumers. However, the rule was finalized largely as proposed.
The final rule reduces the open enrollment period for individual and small group health insurance plans from 13 weeks to just six weeks, which gives consumers significantly less time to shop around for and enroll in the best plan for them.
The final rule also decreases the allowable actuarial values for health plans at each metal level, which could reduce the advanced premium tax credits (APTCs) that help make health plans purchased through the Marketplace more affordable for moderate-income individuals and families. According to an analysis from the Center on Budget and Policy Priorities, even a 2 percent decrease in actuarial value could result in a $327 reduction in APTCs for an individual.
The final rule will make it more difficult for consumers to qualify for and enroll in health coverage through special enrollment periods, which could lead to gaps in coverage and deter enrollment.
Currently, it is unclear how this rule will affect New York because state officials are still studying it closely. Come back to HCFANY next week for more information.
Here is a quick summary of how we did:
Full funding for Community Health Advocates (CHA)
HCFANY Recommendation: Provide $4.75 million in funding for CHA to help people and small businesses obtain, use, and keep their health insurance coverage.
Result: The final budget included $3.5 million for CHA – $2.5 million from the Executive and $1 million from the Assembly. The total funding is an increase of $250,000 from the past year.
Expansion of Child Health Plus (CHP) to Age 29
HCFANY Recommendation: Increase the age limit for CHP from 19 to 29 to create an affordable coverage option for young adults who are not eligible for subsidized health insurance because of their immigration status.
Result: This measure was not included in the enacted budget.
Essential Plan Premiums and Cost-Sharing
HCFANY Recommendation: HCFANY opposed increasing premiums and cost-sharing for consumers enrolled in the Essential Plan (EP), New York’s Basic Health Program for consumers with incomes just above the Medicaid limit.
Result: There were no changes to EP premiums, and there will be no increases in cost-sharing through at least March 2018.
Medicaid Beneficiary Protections
HCFANY Recommendation: HCFANY opposed the following threats to Medicaid beneficiaries: (1) increase in copayments for preferred, non-preferred, and over-the-counter drugs; (2) elimination of spousal/parental refusal, a reduction of resources that spouses and parents of people in managed long-term care or nursing homes can keep; and (3) repeal of “prescriber prevails.”
Result: (1) The budget increased copayments for preferred prescription drugs from $1 to $2.50 and decreased copayments for non-preferred drugs from $3 to $2.50. There were no changes to copayments for over-the-counter drugs; (2) there were no changes to spousal refusal; and (3) there were no changes to “prescriber prevails.”
Enhanced Reimbursement for Safety Net Hospitals
HCFANY Recommendation: Provide an enhanced reimbursement rate for hospitals that: (1) have at least 50 percent Medicaid or uninsured patients; (2) have at least 40 percent of inpatient discharges covered by Medicaid; (3) have no more than 25 percent of patients commercially insured; and (4) are facilities that are part of the state’s five public health systems or federally designated as critical access or sole community hospitals.
Result: The final budget includes $40 million for safety net hospitals that meet the criteria above for fiscal year 2018.
Health Care Regulation Modernization Team
HCFANY Recommendation: Designate at least 20 percent of the seats on this team for health care consumers or advocates and require consumer representation on all team subgroups. Limit the team’s role to making recommendations that would then be taken up by the legislature.
Result: The Health Care Regulation Modernization Team was not included in the final enacted budget.
Late last month, the American Health Care Act (AHCA), which would have devastated the Medicaid program and left millions uninsured, was pulled from the House floor. According to an article in today’s New York Times, the majorities in Congress are discussing a proposal to move forward with the bill.
In addition to all of the harmful provisions in the original AHCA, the new proposal would eliminate community rating, which requires insurers to charge the same price regardless of health status, and the requirement that insurers cover a standard minimum benefits package, known as the Essential Health Benefits. These two changes would effectively get rid of the protections for people with pre-existing conditions and allow insurers to put annual and lifetime caps on payment for covered benefits.
There could be a vote to pass a new bill with these amendments as early as this Friday. Please call your Members of Congress at 844.898.1199 and tell them “Don’t take away our health care.”