Premiums would rise if a last ditch lawsuit by Congressional Republicans against the Patient Protection and Affordable Care Act is successful, a new study finds.
The suit, which accuses the Obama administration of spending money that was not authorized by Congress, takes aim at the cost-sharing reductions (CSRs) that the Department of Health and Human Services have disbursed to insurers to lower the costs of the policies they offer to those with incomes below 250 percent of the federal poverty line.
The CSRs are aimed at silver-level plans on the exchange. While a person who is making above the income threshold bears 30 percent of the cost of health care services if enrolled in a silver plan, those with lower incomes pay for a smaller share of the cost, ranging from 26 percent for those just below the threshold to as little as 6 percent for those with incomes below 150 percent of the FPL.
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If insurers stopped receiving payments from the federal government, they would most likely raise premiums for silver-level plans, charging low-income individuals as much as everybody else.
"Given that the ACA requires insurers to provide low-income Marketplace enrollees with the reductions regardless of explicit funding, we assume that insurers would build these costs into the premiums for Marketplace silver plans," explained Linda J. Blumberg and Matthew Buettgens of the Urban Institute in a short brief on the issue.
However, there would be a solution to keep people from leaving the exchanges over high costs. The government could simply increase the amount of premium tax credits that it currently doles out to those with incomes up to 400 percent of the FPL to help them offset the cost of their insurance.
In fact, the study predicts that the increase in tax credits could make the PPACA exchange more attractive to some people. Essentially, the study suggests that there would be winners and losers if the suit succeeds, but that the law will remain fundamentally intact.
"This is not a case that raises the same kind of specter of undermining the main tenets of the law that King v. Burwell did," Blumberg told The Hill.
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