Congress must pass a bill this week to keep most of the government running beyond Friday, when a government spending bill runs out. It won’t be easy.
The debate over a new spending bill focuses on an esoteric issue affecting the Affordable Care Act.
The question is whether Congress will pass — and President Donald Trump will sign — a bill that also funds subsidies for lower-income people who purchase health insurance under the law. These “cost-sharing reductions” (CSR) have become a major bargaining point in the negotiations between Republicans and Democrats, because the spending bill will require at least some Democratic votes to pass.
Here are five things to know about these cost-sharing subsidies:
How are these subsidies different from the help people get to purchase insurance?
There are two types of financial aid for people who buy insurance from an ACA exchange. People with incomes up to four times the poverty line, or $81,680 for a family of three, are eligible for tax credits to help pay their premiums.
In addition to that help, people with incomes up to two-and-a-half times the poverty line, or $51,050 for a family of three, get additional subsidies to help pay their out-of-pocket costs, including deductibles and copayments for care, as long as they purchase a silver-level plan. Insurance companies are required in their contracts with the government to provide these cost-sharing reductions to eligible people, then get reimbursed by the government.
Why are cost-sharing reductions suddenly front and center?
The fight dates to 2014, when Republicans in the House of Representatives filed suit against the Obama administration, charging that Congress had not specifically appropriated money for the cost-sharing subsidies and therefore the administration was providing the funding illegally.
A year ago, a federal district court judge ruled that the House was correct and ordered the payments stopped. However, she put that ruling on hold while the Obama administration appealed. That’s where things stood when Trump was inaugurated.
If the Trump administration drops the appeal, the funding would cease. However, Congress could also opt to approve funding the payments, which is what Democrats are pushing in the spending bill.
What would happen if these subsidies are stopped?