Several outside conservative groups are blasting a recommendation in President Trump’s budget to fund Obamacare insurer payments.
Outside groups Freedom Partners and Americans for Prosperity, both backed by the Koch brothers, slammed the budget’s recommendation for restoring cost-sharing reduction payments to insurers that reimburse them for lowering out-of-pocket costs for low-income Obamacare enrollees. The budget also calls for funding $812 million this year in risk corridor payments to insurers.
“It is disappointing to see this administration proposing to restart the misguided practice of using taxpayer dollars to subsidize big insurers,” said Americans for Prosperity President Tim Phillips in a statement.
Freedom Partners Executive Vice President Nathan Nascimento said the Trump administration was right when it called the payments a “payoff to insurance companies.”
The anger comes as senators are hoping to add legislation for cost-sharing reduction payments to a long-term spending bill called an “omnibus” set to be taken up by Congress next month.
Conservatives have long despised the cost-sharing reduction payments and President Trump halted the payments back in October.
The payments reimburse insurers for lowering copays and deductibles for low-income Obamacare insurance marketplace customers. The insurers are required to lower out-of-pocket costs for these customers and raised prices overall when the payments were cut off last fall.
The risk corridor program ran from 2014-2016 to help Obamacare marketplace insurers get acclimated to a new market. Risk corridors require insurers that get high profits pay in to the program, which in turn gives money to insurers that have high losses.
Congress included a spending rider in 2013 that required the program to be budget neutral, meaning it could only pay out what it took in.
That led to too many Obamacare insurers requested payments under the program and not enough paid into it in 2014. The reason is insurers priced initial Obamacare plans too low and a sicker-than-expected enrollee population signed up.
Even though the program expired in 2016, the federal government has not fully reimbursed insurers for the payment requests.