AOA Letter on Cost-Sharing Reduction Payments

This letter was sent to U.S. House of Representatives Speaker Paul Ryan; U.S. House of Representatives Minority Leader Nancy Pelosi; U.S. Senate Majority Leader Mitch McConnell; U.S. Senate Minority Leader Charles Schumer; U.S. Department of Health and Human Services Secretary Tom Price; and National Economic Council Director Gary Cohn.

CHICAGO- April 28, 2017– Our organizations, which represent over 560,000 physicians and medical students, write to urge Congress and the Administration to work together to achieve an immediate commitment to continue the cost-sharing reduction (CSR) payments to health plans that are guaranteed under current law. Failure to achieve a commitment to continue the CSR payment would destabilize our nation’s health care system, causing many insurers to either exit the health insurance exchanges prior to the 2018 enrollment cycle or substantially raise premiums, and increase costs to the federal government and taxpayers.

Our members are the frontline physicians who provide physical and mental health care services to millions of men, women, and children each day. They provide care to children, the aged, those with chronic conditions, people battling substance use disorders, and the many individuals who are seeking prevention and wellness services. Our members see firsthand the important role that health care coverage and access to affordable, high-quality care plays in people’s lives and their pursuit of better health and well-being. They are therefore very concerned about the consequences for patient care should the CSR payments end.

According to an independent and nonpartisan analysis by the Kaiser Family Foundation (KFF):

“Many insurers might react to the end of subsidy payments by exiting the ACA marketplaces. If insurers choose to remain in the marketplaces, they would need to raise premiums to offset the loss of the payments. We have previously estimated that insurers would need to raise silver premiums by about 19% on average to compensate for the loss of CSR payments…The premium increases would be higher in states that have not expanded Medicaid (and lower in states that have), since there are a large number of marketplace enrollees in those states with incomes 100-138% of poverty who qualify for the largest cost-sharing reductions.”

Further, the same KFF analysis found that taxpayers and the federal government will spend billions more if the CSR payments are discontinued: “We estimate that the increased cost to the federal government of higher premium tax credits would actually be 23% more than the savings from eliminating cost-sharing reduction payments. For fiscal year 2018, that would result in a net increase in federal costs of $2.3 billion.”

It is imperative that agreement be reached now to continue the CSR subsidies, since most insurers must begin filing rates in May and need certainty on funding at least through 2018.

Our six organizations are united in our belief that fewer insurers offering coverage, raising premiums, and higher federal spending are outcomes that no one wants—neither political party, nor the Administration, nor the constituents they represent. We know for certain that such outcomes would harm the patients cared for by our members who depend on the marketplace to access coverage. Prior to the ACA, the lack of coverage forced patients to choose between going bankrupt or forgoing care. Thus, we urge Congress to work with the Administration to find an immediate solution to continue the CSR payments to health insurers. Whether it is through the continuing resolution, other legislation, or administrative action, the time to act is now.

Sincerely,

American Academy of Family Physicians
American Academy of Pediatrics
American Congress of Obstetrics and Gynecology
American College of Physicians
American Osteopathic Association
American Psychiatric Association

About the American Osteopathic Association

The American Osteopathic Association (AOA) represents more than 129,000 osteopathic physicians (DOs) and osteopathic medical students; promotes public health; encourages scientific research; serves as the primary certifying body for DOs; and is the accrediting agency for osteopathic medical schools. More information on DOs/osteopathic medicine can be found at www.osteopathic.org.

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Media Contact:

Jessica Bardoulas
(312) 202-8038
jbardoulas@osteopathic.org