Connecticut joined 17 other states and the District of Columbia last Friday in suing the White House over President Donald Trump’s decision to end cost-sharing reduction (CSR) payments to insurers under the Affordable Care Act (ACA).
CSR payments, which are mandated under the ACA, reimburse insurers who provide plans with reduced out-of-pocket costs (like copayments and deductibles) to low-income individuals, according to a press release from the Connecticut Attorney General’s office.
“We’re saying that the cost sharing reduction payments are mandatory under federal law, that President Trump is wrong and that these payments are required,” Connecticut Attorney General George Jepsen said.
Jepsen said losing CSR payments would affect students at the University of Connecticut in different ways, depending on individual circumstances.
He said many college students obtain health insurance through their parents. Therefore, if those plans were obtained on the ACA Health Insurance Marketplace, parents could see an increase in premiums, according to Jepsen.
The same could happen to students who have their own insurance from the marketplace, Jepsen said.
When setting insurance rates for 2018, the Connecticut Insurance Department assumed that CSR payments would be cut, according to Jepsen.
“It was an educated guess that Trump would do something like this,” Jepsen said.
In lieu of CSR payments, the Insurance Department designed plans in such a way as to provide tax credits to low-income individuals, Connecticut Assistant Attorney General Robert Clark said.
“What that really means is for certain people up to 250 percent of the federal poverty level, they’ll get new tax credits built into their premiums that will totally mitigate the difference,” Clark said.
An analysis by the Congressional Budget found insurance premiums would rise by an average of 20 percent in 2018 if CSR payments were eliminated.
“If you’re someone who’s not eligible for a tax credit built into their premiums, you’re going to get hammered,” Clark said.
Connecticut insurers have plans in place for 2017 that assume the payments will remain intact, Clark said. These insurers plan to forgo CSR payments in 2018, according to Clark.
“For 2017, this is a problem for the carriers,” Clark said. “They can’t change the rates, they can’t leave, and premium dollars were set.”
Clark said this suit also has implications beyond this year.
“It won’t be long into next year before our exchange and insurance department are already planning for 2019,” Clark said. “One of the goals of this lawsuit is to address the 2019 plan year.”
Jepsen said one concern is people deciding to drop their insurance plans when faced with an apparently higher cost.
“They may not realize they qualify for tax credits in lieu of the subsidies,” Jepsen said.
Trump’s recent executive order is not the first obstacle CSR payments have faced in recent years.
In 2016, Judge Rosemary M. Collyer of the United States District Court for the District of Columbia issued an injunction against the payments in a suit brought by the Republican-controlled House of Representatives.
Collyer, in a 38-page ruling, argued that the payments were unconstitutional because Congress did not specifically authorize funds for them. She ultimately stayed the injunction pending appeal.
In a separate action in May, Connecticut joined 14 other states to intervene in that appeal, according to a press release from the Attorney General’s office.
“The state was concerned that the new administration wouldn’t continue to defend that suit, so we intervened,” Clark said.
Charlie Smart is a campus correspondent for The Daily Campus. He can be reached via email@example.com.