How Do Cuts to Cost-Sharing Reduction (CSR) Subsidies Affect Me?
We discuss how Trump’s announcement to cut cost-sharing reduction (CSR) subsidies will affect those who qualify for CSR assistance and those who don’t.
UPDATE 2019: This page was written when cutting assistance was on the table, the plan was since scrapped. We will update this page if and when it becomes relevant, but it still works to give an idea of what would happen if cost sharing assistance was cut.
Cost-sharing reduction (CSR) subsidies are payments that were promised to insurance companies so they would reduce insurance deductibles of low-income buyers.
They are paid directly to insurance companies, not to individuals. In the short term (this year) lower-income buyers will not be affected by subsidy cuts. Middle-income buyers, who needed an ACA repair badly to begin with, will be hit the hardest.
Fact: People with lower incomes will still get cost-sharing reductions and premium tax credits even if the insurance companies don’t get the CSR payments. The people who make too much to be eligible for subsidies will pay even higher premiums.
Insurance companies have agreed to reduce these deductibles in their contracts. They have to do it in 2018 whether or not the government pays the CSR. Many insurers were worried that the payments might not be made, so they made their 2018 silver plan premiums were priced higher just in case that happened. Most estimates say that the premiums are already about 20% higher than last year because of the insurance companies expecting this loss of CSR revenue.
States that did not expand Medicaid will have larger premium jumps. States that expanded Medicaid will see smaller increases in premiums. Some states will just see increases in Silver Plans; others will see increases in all plans.
The people who will pay for cutting off CSR payments are the taxpayers. Premium subsidies are a federal cost, and federal costs land on all taxpayers.
Open enrollment time is almost here. We encourage you to think about your options very carefully and remember that the ACA subsidies are still there for you if you qualify.
TIP: Congress might come in and save the day and extend cost sharing subsidies. Learn about a bipartisan fix in the works (it has it critics, but something like this is a possibility).