The Trump Administration has just proposed a new rule which seeks to expand the scope of Association Health Plans (AHPs), arrangements in which small businesses can pool together to get the purchasing clout of large employers to get a better deal on private insurance coverage. In principle, that is not a bad idea and in fact is the motivating spirit underlying the Affordable Care Act’s creation of the Small Business Health Options Program (SHOP) component of the health insurance exchanges. SHOP let
Ending Healthcare Payments: Bursting the Balloon or Just Squeezing It?
President Trump has threatened to cancel federal health insurance payments called “cost-sharing reductions.” He hopes this collapses the Affordable Care Act’s health insurance exchanges, creating leverage for further repeal negotiations with recalcitrant Senators and Congressmen. However, the Congressional Budget Office (CBO) reported that ending these payments would actually increase federal costs by $194 billion over ten years and cause a million people to lose health insurance next year.
CBO Report Projecting the Effects of Stopping Cost-sharing Reductions to Insurers
A report by the non-partisan Congressional Budget Office and the staff of the Joint Committee on Taxation estimates the effect of terminating federal payments to insurers to cover costs incurred when offering plans with reduced deductibles, copayments, and other cost sharing to some people who purchase plans through the marketplaces established under the Affordable Care Act (ACA).