Eliminating CSRs would cost the feds bigly, and ACA still under threat

Sepatuads.com   Agustus 16, 2017   Affordable Care Act, Bill Cassidy, cost sharing reduction, CSR, distractions, Donald Trump, Lindsey Graham   Comment  

Today's Managing Health Care Costs Number is $194 billion

Source: General Accountability Office, 8/15/17

The Government Accountability Office (GAO) weighed in late yesterday about the impact of elimination of the cost sharing reductions on federal spending, premiums, and insurance takeup rates.   The Affordable Care Act requires out of pocket cost sharing reduction even if the CSRs are not federally funded - so if the feds stop paying for the CSR, insurers will build this into premium. That premium is heavily federally subsidized.

The results are impressive:

1. The feds would save $47 billion in CSR payments over a decade
2. Incremental costs for increased premium support would be $247 billion
3. Total federal budget deficit will increase by $194 billion
4. About 3 million people will move from employer sponsored insurance into the exchanges
5. Average premiums for those getting CSRs will go up slightly.
6. Insurer market withdrawal will leave 5% of current ACA exchange members in counties with no insurer - meaning that under current law they will not be able to access federal subsidies.   Over the decade, insurers are likely to return to most of these counties
7. The total number of uninsured will go down slightly, as subsidies increase for low income workers.

So - Donald Trump is threatening to cut off CSRs, which would increase the deficit, increase total government spending, and decrease the number of people who are privately insured. 

In the meantime, Lindsey Graham and Bill Cassidy are promoting their Repeal and Redirect plan, which would maintain current ACA taxes, but discontinue the ACA programs and direct these funds to the states.  We all know how well that worked out in the ACA, where states fought for the right NOT to expand Medicaid with virtually 100% federal funding.   In South Carolina alone, the state could have insured an extra 123,000 residents if Medicaid had expanded -and total state funds required would have been very small.

Under the cover of the threat of nuclear war with North Korea and the distraction of Presidential succor for neo-Nazis and the KKK, and despite devastating GAO critique, we shouldn't think for a minute that the threat to the Affordable Care Act has disappeared.

Source  The ACA has dramatically decreased the rate of uninsurance - but it remains far from safe.