Administration announcement to end CSRs, Alexander-Murray proposed legislation to fund future CSRs and stabilize marketplace; our SHOP participation will end

Administration ends cost-sharing reduction payments

The Trump administration announced Thursday, October 12 that cost-sharing reduction payments to issuers will be discontinued immediately. It will take Congressional action and presidential approval to reinstate payments.

There is also a court case that disputes the legality of federal government spending for cost-sharing reductions, House v. Price, that was put on hold by the D.C. Circuit Court of Appeals. If Congress provides a specific appropriation for the cost-sharing reductions, the court case would no longer be relevant.

An additional court case is pending in California, in which 18 state attorneys general have requested a preliminary injunction that would force the federal government to continue making cost-sharing reduction payments. On Wednesday, October 25, a federal judge in California refused to block President Trump’s decision to end subsidy payments to health insurers under the Affordable Care Act. The judge indicated that the government does not have to make payments while litigation over the subsidies unfolds.

Cost-sharing reductions lower out-of-pocket expenses, such as deductibles, copayments and coinsurance. They are available to members that qualify and purchase a silver plan on the Health Insurance Marketplace.

• This change will not affect members’ premiums or cost-sharing levels for the remainder of 2017 as Blue Cross and BCN will not change 2017 benefit plans or rates.
• Members who qualify for cost-sharing reductions will also continue to receive it in 2018 because issuers are still required to provide plans with reduced cost sharing for low-income enrollees on the Marketplace.
• Individuals purchasing market silver plans for 2018 will see higher premiums, due to the loss of CSR funding.

Alexander-Murray proposed legislation to fund CSRs and stabilize marketplace

On October 17, Senate HELP Committee Chairman Lamar Alexander (R-Tenn.) and Ranking Member Patty Murray (D-Wash.) released a proposal aimed at stabilizing the individual health insurance market.

The proposal includes the following provisions:

• Funding CSRs for the portion of plan year 2017 beginning on the date of enactment and for plan years 2018 and 2019
• Increasing 1332 waiver flexibility
• Allowing all individuals, regardless of age, to purchase a catastrophic plan beginning in plan year 2019
• Redirecting a portion of the Marketplace user fees annually to support outreach and enrollment activities for the 2018 and 2019 open enrollment periods
• Requiring the U.S. Department of Health and Human Services and the National Association of Insurance Commissioners to issue regulations for the implementation of health care choice compacts

Discussions among congressional leadership about the proposal are ongoing.

No future plan offerings on SHOP

Blue Cross Blue Shield of Michigan and Blue Care Network will no longer offer plans through the Small Business Health Options Plan program effective with the 2018 plan renewal period. In August, we reached out to SHOP group customers and their enrolled members providing direction and actions required to stay with Blue Cross.

We’ll continue to monitor events and activities about health care reform.

Reform Insights will be published on an as-needed basis going forward to keep you informed of any important developments.