Health insurance co-op Maine Community Health Options (MHCO) has filed a lawsuit against the federal government over the Trump administration’s decision to stop making cost-sharing reduction subsidies, or CSRs.
Those payments were cut off by President Donald Trump in Oct. 2017, with HHS saying it couldn’t legally continue the payments without an appropriation from Congress. As reported by Talking Points Memo, MCHO said in its complaint that insurers still have to provide the subsidies to lower out-of-pocket costs for low-income enrollees, but no longer get reimbursed.
“This has caused Health Options and other [qualified health plan] issuers to suffer large financial losses,” the lawsuit staid. “It also leads to instability in the insurance markets and hinders Health Options’ and other (qualified health plan) issuers’ ability to design and price plans effectively for the ACA exchanges.”
MHCO is the largest individual market insurer in Maine. According to an earlier report by the Maine Bureau of Insurance, the co-op lost $1.9 million in Oct. 2017 alone due to the CSRs being cut off.
Soon after Trump’s decision, 19 states sued to get the payments quickly reinstated, but a federal judge turned down their request. The Congressional Budget Office has said funding the CSRs would actually reduce the federal deficit, since the resulting premium increases would mean more federal money spent on the ACA’s premium support subsidies, but Republicans have criticized CSRs as a “bailout” for insurers.
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