New York’s Attorney General joined 15 others yesterday in taking legal action to protect a part of the Affordable Care Act (ACA) called cost-sharing reductions (CSRs).Cost-sharing reductions (CSRs) help low- and moderate-income people manage high out-of-pocket costs, such as high deductibles or co-payments. Around 730,000 New Yorkers are benefiting from CSRs this year, either because their out-of-pocket costs were lowered or because they are signed up for our Essential Plan. The Essential Plan covers low-income people at very low costs and is funded in part through the CSRs.
The attorneys general are asking the courts to let them defend the CSRs against a lawsuit filed by House Republicans against the Obama Administration. The House’s lawsuit argues that funding for CSRs should be voted on each year in Congress instead of being automatically funded. The Obama Administration was fighting that idea in the courts – but now that President Trump is in charge, he can simply stop defending against the lawsuit. That would immediately mean no CSRs for this year because of a court ruling that asked the Administration to stop paying them until the matter gets settled. (UPDATE: HHS used a required status check on May 22 to ask the courts for more time to consider its options, so the court case is once again paused. Another check-in is required in 90 days. In the meantime, the Trump Administration can chose to pay the CSRs or not pay them.) In the long run it would leave the matter of CSRs to Congress. Stopping the CSRs is a way of dismantling the ACA without passing legislation – so a Congress whose majority party is hostile towards the ACA is unlikely to fund them.
The affidavits filed in support of the motion are a reminder of just how much New York has benefited from the ACA. Two of New York’s major insurance companies provided affidavits stating that premiums will go up for everyone without the CSRs. This is partially because insurance companies are required to lower cost-sharing for eligible customers at least through this year, even if Congress and the President decide not to pay them for it. They will make up that burden by collecting more from customers. Premiums will also go up because many people who get cost-sharing reductions will not be able to afford insurance without them, which means insurance companies will have to spread costs across a much smaller group of customers.
The affidavit provided by the Greater New York Hospital Association cites a 41 percent reduction in admissions of people without insurance, and a 23 percent reduction in visits to the emergency room by uninsured patients since 2013 (the first year New Yorkers could buy insurance on our ACA marketplace). Uninsured patients are a huge cost for hospitals. Suddenly ending insurance coverage for 730,000 New Yorkers will again make hospitals responsible for treating large numbers of people who cannot possibly pay.