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1 The Budgetary Treatment of Cost-Sharing Reductions 1 (June 8, 2018)

handle is hein.congrec/bdgtcsp0001 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE Keith Hall, Director U.S. Congress Washington, DC 20515 June 8, 2018 Honorable Mark Meadows U.S. House of Representatives Washington, DC 20515 Re: The Budgetary Treatment of Cost-Sharing Reductions Dear Congressman: In a May 25, 2018, letter, you asked a number of questions about cost-sharing reductions (CSRs) and their budgetary treatment. That letter conveyed your concerns about the consistency of my and the Congressional Budget Office's handling of the topic, particularly during a hearing before the House Budget Committee on January 30, 2018, and about what influenced our decisionmaking. I hope that this letter and the answers to your questions in the attachment allay your concerns. Cost-Sharing Reductions Insurers who participate in the marketplaces established under the Affordable Care Act (ACA) are required to offer CSRs to eligible people. CSRs decrease deductibles and other out-of-pocket expenses like copayments. To qualify for CSRs, people must generally purchase a silver plan through a marketplace and have income between 100 percent and 250 percent of the federal poverty guidelines (also known as the federal poverty level).' Before October 12, 2017, the federal government reimbursed insurers for the costs of CSRs through direct payments. However, on that date, the Administration announced that, without an appropriation for that purpose, it would no longer make such payments to insurers. Because insurers are still required to offer CSRs and to bear their costs even without direct payments from the government, most have covered those costs by increasing premiums for silver plans offered through the marketplaces for the 2018 plan year, and CBO expects all insurers to do so beginning in 2019. 1 For additional information about CSRs, see Congressional Budget Office, Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2018 to 2028 (May 2018), pp. 8-9, www.cbo.gov/publication/53826. www.cbo.gov

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