Calls to fund CSRs and other payments to insurers in 2018 are rooted partly in a fundamental misunderstanding of why Obamacare premiums continue to rise. Although premium increases are to some degree attributable to the Administration’s cancellation of CSR payments, premium increases were considerable even for policies unaffected by the Administration’s decision.
Lavishing billions of federal dollars on the insurance industry in 2018 is misguided policy. Insurers have secured another round of rate hikes and, with them, billions more in federal premium subsidies. Nor are federal dollars necessary for a state to operate a successful risk-mitigation program, as Alaska has shown.
Trying to rush CSR and reinsurance payments out the door in 2018 will result in wasteful and unnecessary spending, and is more likely to create confusion than to produce the predictability lawmakers seek.
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