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Insurers Get CMS Accounting Rules for Subsidy That Died

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The managers of the Affordable Care Act public health insurance program have published a manual for a multi-billion-dollar ACA subsidy program that ended this fall: the cost-sharing reduction subsidy program.

Health insurers are supposed to use the procedures described in the manual to tell the program managers how much cost-sharing reduction subsidy money they received and how much they might have to pay back to the federal government.

(Related:  Insurers May Still Sell Major Medical in 2019: eHealth)

The program managers have tried to come up with rules that will prevent insurers from getting any kind of extra or double benefits.

Some states and nonprofit organizations, for example, have set up their own subsidy programs. In a discussion of state subsidies, officials say the state or nonprofit subsidy amount should be included when reporting the amount the enrollee paid.

But the amount “should be excluded from the value of cost-sharing reductions provided by the issuer,” officials write.

How health insurers react to the subsidy program rules could affect how likely the insurers are to sell individual major medical coverage in 2019.

A Program That Ended

The cost-sharing reduction subsidy program was supposed to help ACA exchange plan users with income from 138% to 250% of the federal poverty level cope with exchange plan deductibles, co-payments and coinsurance amounts.

The U.S. Department of Health and Human Services stopped making cost-sharing reduction subsidy payments to insurers in October, after officials concluded that the department lacked a valid appropriation from Congress for making the payments. Democrats and Republicans have been working on proposals that could restore funding for the subsidy, but, so far, none has become law.

HHS put a major division, the Centers for Medicare and Medicaid Services, in charge of the ACA public exchange program and exchange program subsidies. CMS has been overseeing the cost-sharing reduction subsidy program both in states and in states with state-administered exchange programs. The new manual applies both in states and in states with state-administered exchange programs.

A copy of the cost-sharing reduction subsidy program reconciliation manual is available here.

— Read Judge Thinks Health Insurers Could Still Get 2017 CSR Money on ThinkAdvisor.

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