Health insurers in California are threatening higher premiums and exchange exits if Obamacare’s cost-sharing reduction payments are not made.
The Affordable Care Act created cost-sharing subsidies to rein in the cost of out-of-pocket expenses for lower-income individuals by reimbursing insurers. These payments are now in limbo after two House committees called the payments unconstitutional and filed a lawsuit against them.
The House Ways and Means and Energy and Commerce committees said that the Obama administration was funding the program without a permanent appropriation from Congress, which made them unconstitutional.
Now insurers in California are saying that if the federal government fails to make these payments, they will be forced to increase premiums or exit the Obamacare exchanges completely.