If the House Republicans are successful in winning House v. Burwell, it would result in $47 billion more federal spending over the next decade and smaller marketplaces, according to a report from the Urban Institute, a Washington, D.C.-based think tank that researches social and economic policy.
In the lawsuit, the House claims the cost-sharing reductions under the Affordable Care Act, which are paid to low-income enrollees with Silver plans, are inappropriate because there is not a Congress appropriation to make these payments.
The Urban Institute used the Health Insurance Policy Simulation Model to project what would happen if these payments were eliminated, assuming payers would build those costs into the premiums for Silver plans.
The model showed the following three results if the court ruled in favor of the plaintiff and costs associated with the CSRs are incorporated into premiums.
1. Silver plan premiums would increase $1,040 per person on average. So, for a 40-year old with a Silver plan for single coverage, the premium would total $4,640 annually in 2016, which would be more than the cost of Gold plan premiums, according to the report.
2. Premium tax credits would increase $1,040 on average. CSRs are only available to Marketplace enrollees with income below 250 percent of the federal poverty level, but tax credits apply to all eligible individuals up to 400 percent of the FPL, according to the Urban Institute, regardless of the coverage they purchase. So this means if Silver plan premiums increase, tax credit calculations would increase across the board for all tax-credit eligible individuals, according to the report.
3. Marketplace enrollment would decrease by 1 million. Enrollees ineligible for tax credits would be strongly disincentivized to buy Silver plans and find less expensive coverage off the Marketplace. By increasing the cost of the Silver premium, many individuals would shift to the Gold plan. Some tax-credit eligible people with income below 200 percent of the FPL with the largest CSRs would keep the Silver plan and about 700,000 individuals over 200 percent of the FPL would enroll in the Marketplace, according to the report. Overall, the shifts would result in decreased Marketplace enrollment and a decline by about 400,000 in uninsured individuals. However, the costs to the federal government would increase about $3.6 billion per year, according to the report.
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