Judge Denies TRO Request To Force CSR Funding–Without Courts or Congress, It’s Up to Covered California to Protect #ACA Consumers

A judge denied a request for a temporary restraining order by the Attorney General of California and 18 other states to compel the Trump Administration to reverse a decision to undo funding for cost-sharing reductions for low-income patients in state exchanges.
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For immediate release: Wednesday, October 25, 2017

For more information, contact:
Anthony Wright, executive director, Health Access California, 916-870-4782 (cell)
Rachel Linn Gish, communications director, Health Access California, 916-532-2128 (cell)

JUDGE DENIES TRO REQUEST TO FORCE TRUMP TO IMMEDIATELY REINSTATE COST-SHARING REDUCTION FUNDS

Without Court or Congressional Action Before Open Enrollment Starts November 1, Covered California’s Creative Workaround Will Need to Suffice to Protect Consumers

  • Trump Administration Action to Undo Funding for Already-Budgeted and Contracted Cost-Sharing Reductions Actually Costs the Federal Government Money, But Has Led to 12.4% Higher Premium Costs & Consumer Confusion
  • Covered California Has Set Up Surcharge to Only Apply to Silver-Tier Plans Where Consumers Receive Federal Help – Therefore Their Subsides Will Also Increase; Those Without Subsidies Won’t See a Spike.
  • Even With Workaround That Can Technically Protect Virtually all Californians From Trump Tax, Consumer Confusion May Leads to Some Forgoing Coverage or Paying Too Much

SACRAMENTO, CA—A judge denied a request for a temporary restraining order by the Attorney General of California and 18 other states to compel the Trump Administration to reverse a decision to undo funding for cost-sharing reductions for low-income patients in state exchanges. Without court action ordering the Trump White House to reinstate the $7 billion in funding for already-budgeted cost-sharing reductions in the ACA, premiums for some Covered California health plans are spiking another 12.4%. 

“The court was right to say that the ACA is the law of the land, and while it declined to force the Trump Administration to fund cost sharing reductions for a few months, we hope the Court will eventually decide what the Trump Administration has done is illegal. The court is also correct that this issue can and should ultimately be rectified by Congress, with a permanent appropriated for this already budgeted, already contracted benefit for consumers to have the health care they need. This defunding of these already-budgeted funds does not save money but increases costs for both consumers and the federal government,” said Anthony Wright, the executive director of Health Access California, the statewide health care consumer advocacy coalition.

“Without the courts or Congress acting in time to prevent this Trump tax on premiums, we are thankful Covered California had the foresight to creatively come up with a workaround to largely hold consumers harmless in our state. Yet even in California this Trump Administration action causes unnecessary complexity and confusion. We are concerned that the higher premiums will cause some California to forgo coverage not realizing they can avoid the increases because of subsidies or other options.” said Wright. “We are glad California has the will and wherewithal to protect consumers, but the long-term solution is a Congressional appropriation, like the bipartisan proposal by Senators Alexander and Murray.”

With no Congressional or court action, California’s state-based individual health care marketplace, Covered California, will be imposing an additional 12.4% rate increase on Silver-tier plans, on top of other premium increases.  Because this applies only to Silver-tier plans, most of the consumers that see the surcharge will also see an increase in their subsides, therefore experiencing no change in the cost of their coverage. Those who are not subsidized can avoid the surcharge by choosing plans in other tiers, or Silver plans outside of Covered California. 

There were more than 1.2 million subsidized Covered California members among the nearly 1.4 million people enrolled in CoveredCA as of March 2017. According to Covered California, an analysis on the impact of the CSR surcharge found that 78 percent of subsidized consumers would either see no change in what they would pay for insurance in 2018, or would pay less than what they would have paid if there had been no CSR surcharge. The remaining 22 percent will see some form of higher net premium because of the CSR surcharge, and about half of them will see increases of less than $25 per month. Californians who do not get financial help (not in a silver-tier plan or not in Covered California) will not be charged the surcharge. In addition, the small group of Covered California consumers with Silver plans who do not receive financial help to pay their premium, about 65,000 customers, can also avoid paying the surcharge by switching to a different metal tier or buying near-identical Silver coverage offered off-exchange. 

Resources: 

Health Access Fact Sheet: Financial Help for Lower-Income Consumers at Risk

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