Additional Follow-Up About the Budgetary Treatment of Cost-Sharing Reductions
Report
CBO provides additional information to Congressman Mark Meadows on its method for determining the budgetary treatment of the government’s payments to reimburse health insurers for cost-sharing reductions they provide to eligible people.
In a September 6, 2018, letter, Congressman Mark Meadows asked for additional information related to his earlier questions about the budgetary treatment of payments for cost-sharing reductions (CSRs) provided by insurers in the marketplaces established under the Affordable Care Act. Specifically, concerned about the sequence of events, he asked about when the Congressional Budget Office undertook its analysis of health insurance premiums and when the agency decided how to incorporate that information into its baseline projections published in April 2018.
CBO analyzed how premiums for 2018 had been affected by the lack of CSR payments in all states and the implications for the agency’s baseline projections before those projections were finalized in March 2018. To do so, it consulted extensively with state insurance regulators, state-based marketplaces, and insurers. In fact, insurers’ plans had become public knowledge well before that date. Also, before finalizing its baseline in March 2018, CBO fully considered the relevant statutory language and precedent and how to interpret them with respect to incorporating its analysis into the baseline.
The approach CBO used allows the baseline projections to reflect what is actually happening in insurance markets, rather than the alternative of assuming the continuation of direct payments that were not being made.
