HHS: Cost-sharing subsidies in ACA will be funded

Subsidies to health insurers offered under the Affordable Care Act (ACA) will continue to be funded, HHS told the New York Times, even though House Republicans had made the argument in court the payments were illegal.

The cost-sharing reduction subsidies, or CSRs, compensate insurers for reducing deductibles and out-of-pocket maximums for low-income customers on the ACA exchanges. In 2017, more than seven million people qualified for them, according to the Kaiser Family Foundation.

Those subsidies could be pulled, however, thanks to a lawsuit filed by the House of Representatives against HHS during the Obama administration. The suit argued the payments to insurers were illegal because Congress never appropriated the money. A district court judge ruled in favor of the House, but the case has been put on pause while the Trump administration decides whether to defend the Obama-era subsidies.

HHS told the Times it will continue paying out the subsidies to insurers.

“The precedent is that while the lawsuit is being litigated, the cost-sharing subsidies will be funded. It would be fair for you to report that there has been no policy change in the current administration,” the agency said in a statement.

The move may offer some assurance to skittish insurers contemplating whether to exit the exchanges, which are now being run by an administration that wants to repeal the ACA and has allies who claim the markets are in a death spiral.

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