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Challenges Remain Around ACA Subsidy Payments After Meeting with CMS Administrator

April 21, 2017

Senior representatives from major health insurers met with Centers for Medicare and Medicaid Services’ leadership earlier this week, seeking clarity for Affordable Care Act’s (ACA) subsidy funding for the cost sharing reduction program.

To date, there has not been a final decision by the Trump Administration on the future of the cost sharing reduction (CSR) program. Continued delays in the decision on the CSR program may lead to a number of health insurers opting out of participating in the ACA’s health insurance market exchanges for 2018.

Cost sharing reductions are  critical to making the cost of medical services more affordable for consumers. The elimination of funding for subsidies would lead to a significant rise in premiums, making health insurance coverage unaffordable to many. HAP is concerned that this would increase the number of uninsured in Pennsylvania.

For 2017 open enrollment, there were more than 426,000 individual plans purchased through the Pennsylvania health insurance marketplace exchange. Four out of every five plans are currently receiving some financial support by way of advanced premium tax credits or cost sharing reductions, making monthly premiums more affordable to sustain health insurance coverage. More than half (55%) of the qualified health insurance plans selected through the Pennsylvania health insurance exchange will receive financial support by way of cost sharing reductions. 55 percent represents more than 230,000 Pennsylvanians.

Source: Centers for Medicare and Medicaid Services, 2017

HAP and the Pennsylvania hospitals and health systems continue to promote health insurance coverage for all Pennsylvanians. To date, ACA provisions have supported more than 1.1 million Pennsylvanians with health insurance coverage, providing better access to high quality health care services and dramatically reducing the uninsured population of Pennsylvania. HAP continues to provide resources on the effects of the ACA in Pennsylvania on its website.

For more information, please contact Jeff Bechtel, senior vice president health economics and policy or Phillip Burrell, director, health market research.

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