Feb 8, 2017

What insurers really want: Payments for Obamacare subsidies

Andrew Harnik/AP

The first big Obamacare rule from the Trump administration may try to help insurers in some ways, like tightening the enrollment rules and letting them charge older customers more. But a new study out today sends a strong signal about what they really need to stay in the Obamacare markets: They want to be paid back for the subsidies they've paid out to low-income customers.

The study — conducted by Milliman for the Association for Community Affiliated Plans, a group representing safety-net insurers — concluded that there would be "significant losses for many insurers in the individual market" if the Trump administration and Congress don't reimburse them for the cost-sharing reduction subsidies.

Why it matters: The payments are up in the air right now because of a lawsuit House Republicans filed against the Obama administration, arguing that the subsidies were paid illegally because Congress never provided the money for them. A federal judge ruled against the subsidies, and if the Trump administration decides to drop the appeal, the payments could stop.

Key numbers:

  • Customers who got the subsidies in 2014: 3.1 million
  • Payments to insurers: $2.8 billion
  • Customers who got the subsidies in 2015: 5.2 million
  • Payments to insurers: $4.9 billion
  • Customers who got the subsidies in first half of 2016: 5.9 million

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