The Financial Consequences of Terminating the ACA’s Cost-Sharing Reduction Payments
<p>To make health care more affordable, the Affordable Care Act (ACA) reduces both the cost of insurance premiums and the out-of-pocket expenses that lower-income enrollees pay for care. More than half of ACA marketplace enrollees incur lower deductibles and copayments as a result of these cost-sharing reductions, which the federal government supports through payments to insurers. </p><p>In a new <em>To the Point</em> post, Wake Forest University’s Mark A. Hall and Virginia Commonwealth University’s Michael J. McCue explain that one of the looming issues in the ACA repeal-and-replace discussion is whether the federal government will continue making cost-sharing reduction payments to insurance companies.</p>
<p>To understand the consequences of ending these payments, the authors examined federal rate filings by the 217 health insurers selling coverage through the marketplaces in 2017. They found that, without these payments, insurers would likely suffer billions of dollars in losses.</p>