ACA Marketplaces Poised to Grow Stronger — If They’re Not Sabotaged
Under the ACA, as we've explained, about 6 million low- and moderate-income people who are enrolled through the marketplaces are eligible for CSR plans with lower deductibles and other out-of-pocket costs. To qualify for CSRs, a person must have income up to 250 percent of the poverty line (or about
If the Administration continues to make the CSR payments as it's done to this point, some insurers are planning to charge virtually flat premiums in 2018. Consider that:
* In Arizona,
* In North Carolina,
* In Alaska, the sole marketplace insurer, Premera, submitted a rate decrease of more than 20 percent for 2018 assuming that CSRs wouldn't be paid, meaning that the rate drop would be even larger if the payments are made.
If the Administration stops the CSR payments, marketplace insurers still must provide CSR plans and enrollees are still entitled to CSRs, as long as a marketplace plan is available where they live. But insurers wouldn't be compensated for providing CSRs (though they'd likely seek retrospective relief in the
In
The new rate data show premiums that insurers have submitted for approval; they're not final. The data also represent changes in the average "sticker price" premiums, not what individuals would actually pay for coverage out of their pockets. That's because people who receive ACA premium tax credits (who account for the overwhelming share of marketplace enrollees) would be shielded from the premium increases because their premium cost is limited to a percentage of their income and the amount of their tax credit rises with premium costs.
That means, however, that people who have incomes too high to qualify for subsidies would bear the brunt of these rate increases. In addition, federal costs for premium tax credits would rise (generating overall higher net federal costs). Moreover, some insurers would likely withdraw from the marketplaces altogether. That could leave more consumers living in "bare" counties -- that is, with no marketplace plans.
By stopping the CSR payments, the Administration would weaken the individual market's financial health and stability. Consequently, it should eliminate the uncertainty and pledge to continue the payments.
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