Eliminating President Obama’s Cost Sharing Reduction (CSRs) payments. Is it legal, constitutional, and a good idea? Let’s discuss.

Our intent was to continue discussing President Trump’s EO providing for the formation of Association Health Plans. But, in the interest of fair discussion, maintaining topical subjects and allowing more details from HHS, Treasury and IRS to develop, let’s discuss the President’s Executive Order discontinuing the Obama era subsidy payments to insurers. Is President Trump’s action legal or even a good idea?

First of all, how else does anything get done in Washington to correct any issues let alone the problems caused by the ACA if steps aren’t taken to initiate action by Congress. It seems that our Congress can only take action when there is a crisis or deadline. It is certain that Congress, particularly the GOP, does not have the stones to take on the opposition to changing the ACA without some catalyst to make them do so.

Which brings us to the Cost Sharing Reduction payments, the subsidies paid to insurers for low-income citizens out-of-pocket cost, which President Obama initiated. The Courts have already ruled that these payments are unconstitutional. 

The money for the subsidies was never appropriated by Congress, but President Obama paid insurers anyway.  The payments were ruled illegal by a Federal Appeals Court last year, but the order was stayed pending congressional action.

It’s estimated that about 6 million enrollees in the exchanges qualify for the cost-sharing payments this year, costing the federal government about $7 billion in 2017.  Insurance companies are required to fund the payments to reduce deductibles and co-insurance even if they are not reimbursed by the federal government.

If this were not the case then any President could initiate payments out of the US Treasury for any project a President desired. For example, President G.W. Bush could have pulled funds to start and continue the war in Iraq.

President Trump would be free to start writing checks to pay for the new border wall between the US and Mexico without the approval or appropriations from Congress. I’m sure most Libs would love that. In a country where the citizen’s freedoms are set for in the Constitution do we want our leaders to be free to pick the laws he/she wants to ignore or follow? 

So, if President Trump can’t decide unilaterally to pay for the border wall then how could President Obama decide to make payments to insurers unilaterally?

Consider some perspective. These CSRs are intended to cover the out-of-pocket costs such as deductibles, copays, and co-insurance  for low-income citizens covered on individual plans through an ACA authorized state exchange.

Also for perspective it’s important to remember that only about 10 million Americans are actually covered by the individual exchanges. As stated above, experts calculate that the CSRs affect about 6 million citizens.

So, once again a big hub-bub is created in the media for 6 million folks in a country of 330 million about payments estimated to $7 Billion. It might also be interesting for Americans in 48 states to know that about 3 million of the 6 million people receiving the CSRs reside in California and New York.

The point isn’t that these people don’t need and deserve assistance. Nor is the point that citizens from two of the most liberal states in America require around half of all these payments. The point is that the actions taken by the Obama administration to make these payments was/is unconstitutional. Even though those 6 million good Americans may deserve this help, don’t we need to follow the law. Why didn’t the Obama administration do the right thing and shouldn’t we expect Congress to do the legal thing.

Maybe the states should make these payments to insurers out of their own state treasuries. The payments might then be accounted for and more closely monitored. But, certainly the citizens of these states would be acutely aware of the impact.

Sure, I realize the GOP did not vote for the ACA and now the issue flares up during the GOP’s leadership which seems unfair and certainly untimely. The Obama team was masterful in its timing of many aspects of the ACA which is worth an entire Post on its own. 
But, the GOP had 7+ years to develop a workable replacement and failed to do so.

Next step? We’ll discuss further but first, stick to the facts and the constitution. Second, write and present a realistic replacement plan that provides solutions for all Americans including low income citizens, employees, employers, patients, providers,  that provide more alternatives, better choices and lower costs as its focus.
Simple, right? We’ve already outlined it in previous Posts.

Let me know what you think.
I enjoy the feedback especially since we’re all in this together.

Until next week.

Mark Reynolds, RHU
559-250-2000
mark@reynolds.wtf

 

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