Funding the Affordable Care Act's cost-sharing subsidies would lower premiums by 15-20%, according to an analysis being circulated around congressional offices from the Office of Management and Budget. OMB says those subsidies would be more cost-effective than a new reinsurance program.
Why it matters: Reinsurance has been gaining steam on Capitol Hill, and Sen. Susan Collins is still owed a vote on a reinsurance bill. But the White House budget office is saying Congress could get a better deal by restoring a funding stream that President Trump cut off last year.
The numbers:
- President Trump's decision to quit making the cost-sharing payments this year caused premiums to rise by 15-20%, the analysis says, and funding them next year would undo that increase.
- It also says that for every $1 billion spent on a reinsurance program — which would compensate insurers for their most expensive claims — individual market premiums would decrease by only 1%.
Key quote: "We project funding CSRs would have a greater impact on reducing premiums than any of the reinsurance funding levels that have been proposed, and would have more bang for the buck in terms of Federal spending."
