I’ve gotten this question from my clients many times in the last week due to some confusion about what is being reported. The answer is NO. Subsidy’s, otherwise known as APTC, and the whole ACA law are still in effect. What the Trump administration cut off where payments to insurance companies to cover Cost Sharing Reductions (CSR’s) in plans.
CSR’s are for people that make less than 250% of Federal Poverty Level. If a single tax filer is making between about $12,000 and $17,500 per year, then they are between 100% of 150% of Federal Poverty Level (FPL). The ACA law mandates that these consumers get plans that have a lower deductible and out of pocket max than a standard silver plan. For example, in Austin, TX, a standard Blue Cross Silver 102 plan has a deductible of $3000, and a max out of pocket of $7150, but someone making between 100% of FPL and 150% of FPL would get a modified CSR plan that would reduce their deductible to $0 and their max out of pocket to $700 on that same Blue Cross Silver 102 plan.
So, the question was, who pays for that difference? From the $3000 deductible to the $0 deductible? Or from the $7150 to the $700 max out of pocket? The government has been reimbursing the insurance companies for part or all of that difference over the last several years. That is what the Trump administration took away, was the funding for that differential. Their stance is it was never funded by congress and that for them to pay it, that it needs to be funded. The other side of the isle would say that it has always been funded and why not keep doing so. I will not get into the politics of it, because as they say, it is what it is at this point.
What are the ramifications? Most of the insurance companies filed two sets of rates depending upon what the administration did. It appears that most companies will use their “higher” rates because of the decision. This shouldn’t have much of an effect on those consumers that are getting a subsidized plan, but it would surely have a greater impact on those that are making more than 400% of FPL and paying full price on a plan. Congress is in negotiations to fund the CSR payments to insurance companies, but it may be, and probably would be too late to change the prices for November 1st.