It’s not every day that hospitals and insurers see eye to eye, but there is one thing we agree on — the government must continue to help lower the cost of health care that millions of lower-income Americans receive.
The Cost Sharing Reduction (CSR) payments, which have been paid on a monthly basis to insurers for the past three years, are an integral part of the Affordable Care Act (ACA). Whether to continue with the payments is a central issue in the ongoing health care reform debate in Washington.
The CSR program is critical to our ability to provide comprehensive and affordable care to patients across the country but it is caught in an unresolved legal quagmire.
These payments have made it possible for patients who earn up to 250% of the federal poverty level, or roughly $60,000 dollars for a family of four, to see a doctor, receive treatment, get their needed medicine and, in some cases, get the surgery needed to restore their health — at a price they can afford. This helps reduce the number of hospitalizations, readmissions and unnecessary visits to the emergency room.
Nearly 7 million people, or almost 60% of those in the ACA marketplace, receive help that reduces their deductibles, copayments and out-of-pocket costs as a result of the CSR program. This amounts to at least $7 billion per year in help.
However, a lawsuit by Republicans in the House of Representatives that began during the Obama administration challenged the constitutionality of the method by which the payments were made. This case is unresolved, and the legal limbo and political fighting are threatening to end the payments.
The House-passed version of the “repeal and replace” bill, the American Health Care Act (AHCA), did not address this issue, leaving it up to the executive branch to decide whether to make these payments since the legal case still sits in the courts.
However, as the Senate considers its bill, there is discussion about the possibility of making the payments, which is something the chairman of the House Ways and Means Committee, Kevin Brady of Texas, called for last week. While the Senate bill currently has the payments included in its draft, it is not clear this provision will remain in the bill as opposition to the overall bill builds.
Assuming the payments are made, a question remains: For how long?
If the Trump administration decides to stop making the payments, health insurance companies will be stuck with the bill; they still have the responsibility of reducing the payments on behalf of their customers but absorb the cost. If this happens, most experts believe, the insurers will either drop out of the program or raise premiums sharply to account for this new cost.
Regardless, the outcome would likely be millions either losing or dropping coverage with the consequence that they would no longer seek medical care until it was an emergency — a return to the old days. If this market disruption happens, I believe individual and community health will decline because patients will be shut out of the health care system because it’s no longer affordable.
Hospitals will certainly be negatively impacted if the subsidies are eliminated. If millions of Americans lose or drop their coverage, we will see a jump in bad debt and uncompensated care — that is care for which we receive no payments. In this scenario, everyone else will face higher premiums, higher deductibles and higher out-of-pocket costs to help cover those who no longer have coverage.
Eliminating CSR payments would have an immediate, negative impact on patients — their health and their finances will take a huge hit. These payments give patients who need the most help the stability they need to ensure they receive the high-quality care they deserve.
Our elected officials, in the name of individual and community health, must continue to fund CSR payments until a better solution is developed for the people who need care the most.
