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Blues fear high PPACA subsidy program costs

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One health insurer says administering a major Patient Protection and Affordable Care Act (PPACA) subsidy program will be much more expensive than Obama administration officials think.

The program — the cost-sharing reduction (CSR) program — cuts out-of-pocket medical expenses for low-income exchange users. The Centers for Medicare & Medicaid Services (CMS) is already sending CSR cash to insurers, based on limited information about the enrollees. In 2015, the insurers and CMS are supposed to reconcile any gaps between what CMS paid in 2014 and what CMS should have paid.

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CMS officials say filing CSR reconciliation reports will cost an issuer less than $2,000 per year.

Kris Haltmeyer, a vice president at the Blue Cross and Blue Shield Association (BCSBSA), says one member told the association that the actuarial and technology services for the program will cost about $350,000 per year.

“CMS should revise the burden estimate sharply upwards, to more accurately reflect the true costs issuers will bear in complying with these reconciliation reporting requirements,” Haltmeyer writes in a comment letter sent to the federal Office of Management and Budget (OMB).

CMS is putting CSR information collection review efforts through a routine OMB review process.

The CSR program was created by PPACA Section 1402.

Exchange users with incomes under 250 percent of the federal poverty level who buy silver-level coverage through a PPACA exchange can use the CSR program to reduce the financial burden of paying for deductibles, co-payments and coinsurance amounts.

For the first few years, the issuers can choose between filing CSR reconciliation reports using a standard method or a simplified method.

In comments on the CSR information collection review, insurers asked officials when CMS will give them the enrollee CSR information they need to get through the reconciliation process.

“CMS is currently working with issuers and state-based marketplaces to transition from making aggregated plan-level payments to making payments on a policy-level basis,” CMS officials said in a response to the question. “Issuers should have sufficient member level payment data for the 2014 benefit year by the time reconciliation of CSR amounts occurs in 2015.”

CMS officials did agree with two commenters’ suggestion that it should include an optional place for an insurer to report how much CSR money it thinks it’s received from CMS.

The commenters said putting the number in the reconciliation reports could help CMS look into any discrepancies between what it thinks it’s paid insurers and what insurers think CMS has paid them.

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