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1 Appropriation of Cost-Sharing Reduction Subsidies 1 (March 19, 2018)

handle is hein.congrec/cbomayd0001 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE Keith Hall, Director U.S. Congress Washington, DC 20515 March 19, 2018 Honorable Lamar Alexander Chairman Committee on Health, Education, Labor and Pensions United States Senate Washington, DC 20510 Re: Appropriation of Cost-Sharing Reduction Subsidies Dear Mr. Chairman: On March 19, 2018, the Congressional Budget Office and the staff of the Joint Committee on Taxation (JCT) produced a cost estimate for the Bipartisan Health Care Stabilization Act of 2018 (BHCSA). The agencies estimated that enacting the BHCSA would increase the deficit by $19 billion over the 2018-2027 period relative to CBO's baseline, primarily because of the cost of subsidizing reinsurance or invisible high-risk pool programs in the nongroup health insurance market. The reduction in premiums associated with those programs would primarily benefit people with income greater than 400 percent of the federal poverty level (FPL). This letter responds to your request for additional information about that estimate. You requested an alternative estimate of section 602(b) of the bill, which would appropriate such sums as may be necessary for payments for cost- sharing reductions (CSRs) authorized by section 1402 of the Affordable Care Act (ACA).2 Specifically, you asked that CBO and JCT provide an alternative estimate that reflects the fact that insurers are not being separately reimbursed through an appropriation for the costs of CSRs.' Under such a scenario, CBO and JCT estimate that enacting section 602(b) 1. Most people with incomes below 400 percent of the FPL purchasing nongroup insurance receive premium tax credits that largely insulate them from changes in gross premiums. 2. The ACA comprises the Patient Protection and Affordable Care Act (Public Law 111-148) and the provisions of the Health Care and Education Reconciliation Act of 2010 (Public Law 111-152) that are related to health care. 3. CSRs take the form of reduced deductibles, copayments, and other means of cost sharing for eligible individuals enrolled in silver plans through marketplaces.

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