Trump signs executive order ending Affordable Care Act reimbursements

Donald Trump made perhaps the most immediately consequential health policy decision of his presidency late Thursday, when his administration announced that it will no longer make so-called “cost-sharing reduction” payments to insurers.

What are these payments and what are the consequences of ending them? Here are some answers.

The payments are a key part of the Affordable Care Act, the health care law also known as Obamacare.

The cost-sharing reduction payments, or CSRs, are subsidies that under the ACA insurers are required to provide to low-income customers in order to make insurance more affordable. These subsidies are only for people who buy insurance in the individual market, which means they buy coverage on their own instead of getting it through their employer or the government. The individual market insures about 8 percent of Coloradans.

The CSRs are different from the better-known subsidies for people in the individual market — the tax credits that the federal government pays to reduce people’s premiums. Instead the CSRs are for only the lowest-income people in the individual market and help pay deductibles and other out-of-pocket costs. About 33,000 people in Colorado receive help from the CSRs, according to the Kaiser Family Foundation.

They would have cost the federal government about $7 billion this year.

Under the Obama administration and the Trump administration until Thursday, the federal government had been reimbursing insurers for providing the CSRs. The government was expected to spend about $7 billion on them in 2017, according to the Congressional Budget Office. That annual cost would have risen to about $16 billion in 2027 had the payments been left in place.

Congressional Republicans sued to stop them.

Republicans in the U.S. House of Representatives sued the Obama administration in 2014 to block federal reimbursement of the subsidies, arguing that the payments had not been authorized by Congress. A trial court judge last year ruled in favor of Republicans, but the judge’s order was put on hold while the Obama administration appealed. That meant the payments were in limbo, kept alive only by the Trump administration’s willingness to continue the appeal.

They are supported by a bipartisan group of governors.

Continuing the CSRs, at least for a little while, was a major component of the health care plan put forth this summer by Colorado Gov. John Hickenlooper, a Democrat, and Ohio Gov. John Kasich, a Republican. The payments also received the backing of a bipartisan committee of governors at an August meeting of the National Governors Association.

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