DALLAS – A federal judge has agreed with Republicans that certain Affordable Care Act subsidies to health insurers are unlawful because Congress never approved the funding.
The issue involves those people whose income is between 100 percent and 250 percent of the Federal Poverty Level—i.e., between $24,250 and $60,625 for a family of four in 2016—who are enrolled in a Silver-level plan through an Obamacare exchange. The law requires health insurers to reduce their cost sharing, such as deductibles and copays.
“Obamacare authorizes the Department of Health and Human Services (HHS) to pay health insurers, compensating them for the value of those cost-sharing reductions,” said Institute for Policy Innovation (IPI) resident scholar Dr. Merrill Matthews. “However, the law did not provide funding for those payments and Congress has never approved that funding separately. There are no constitutionally appropriated funds to send to the health insurers.
“A number of news reports are absolutely wrong in their reporting, claiming the judge’s decision will hurt lower-income beneficiaries of the reduced cost-sharing program. By law, health insurers must still provide the cost-sharing breaks; but they won’t receive their federal reimbursements until the situation is resolved. So it is the insurers that are harmed by the decision, not families.”
“The media and the White House want to make it sound as if low- and middle-income families are hurt by the decision. And though the judge stayed her decision pending appeal, it’s a fair question as to how long health insurers can continue to provide the cost-sharing discounts unreimbursed. But that’s an argument for repealing Obamacare and replacing it with something that will actually increase access to health care, lower the cost and improve quality—all things Obama said his law would achieve but hasn’t.
May 12, 2016