DUNCAN — Our current health care system is akin to a bowl of alphabet soup: a pool of acronyms that has become a tasteless mix of legislation that seems to do nothing but float around the U.S. Capitol bowl.
Many people don’t know the ins-and-outs of these conjoined letters; however, if there is one thing people understand about health care, it’s that these acronyms and the insurance marketplace are failing us. For many, the Affordable Care Act (or ACA) commenced the swelling in insurance premiums, and this is only predicted to worsen if we destabilize an already volatile market by not funding cost sharing reductions (or CSRs), another acronym born out of the ACA.
CSRs are discounts for those in the insurance marketplace who fall within certain criteria, including income, number of persons in the household and other factors. Currently, 60 percent of everyone in the marketplace exchange — 7 million people — utilize CSRs to reduce deductibles, co-payments and other out-of-pocket health expenses. The U.S. Chamber of Commerce recently reached out to Capitol Hill urging Congress and the president to fund CSRs, calling this “the most critical action to help stabilize the individual market for 2017 and 2018.”
The urgency lies in the mass effects that abolishing CSR funding would have: It’s a trickle-down effect that starts with insurers. CSR subsidies are an imperative part of the Affordable Care Act’s plan to help low-income persons afford coverage. And while protecting CSRs isn’t about sustaining the ACA, it is about the effects of hasty dismemberment.
Since the marketplace relies on everyone being enrolled to be functional, it’s critical that those who might not normally purchase an insurance plan due to financial strain participates. Otherwise, premiums go up for everyone. Persons with incomes between 100 percent and 250 percent of the federal poverty level ($11,880 to $29,700 for individuals) are eligible to enroll in plans with CSRs that lower deductibles, copayments or coinsurance, thus eliminating the stress on their own out-of-pocket expenses.
To break it down further, insurers who participate in the marketplace are liable to provide these CSRs, and the costs are then reimbursed by the federal government. According to CommonWealthfund.org, if federal reimbursements cease, insurers have four potential options:
- Absorb the cost
- Request a midyear premium rate increase
- Exit the ACA marketplace
- Exit the entire individual market and no longer sell plans to individuals on or off the marketplace.
This has already happened to a degree. At present, Oklahoma relies on only one federal marketplace provider.
Eliminating CSRs would be bad for businesses
Furthermore, the impact of eliminating or rolling back CSRs would not be limited to persons participating in the exchange. Analysts estimate that if CSRs are not funded, premiums will rise by 19 percent for consumers both on and off the exchange. This means taxpayers will spend more to pay for the rising cost of premiums.
It also means federal subsidies for premiums would increase by almost 30 percent a year and that the burden for health care would further fall on employers who provide group insurance to employees as they face higher premiums. We can all perceive the outcome if extra tensions are placed on small businesses.
Stabilization of the health insurance market is critical while lawmakers formulate a plan to actualize health care reform. Funding CSRs is the only way to keep a healthy number of insurers competing in every market. Consumers win when businesses compete. Cost sharing reductions are a vital part of the individual market that tens of millions of Americans rely on for affordable care.
Let’s not make a broken system worse by eliminating CSRs.
