Kaiser, Oscar, Blue Cross Blue Shield plans among big winners of cost sharing reduction payments

Over 100 Affordable Care Act plans are owed more than $1.5 billion in cost-sharing reduction payments, according to an October 22 ruling in the U.S. Court of Federal Claims.

Ten Kaiser Foundation health plans will receive over $216 million; Oscar Health's six plans will get over $68 million, from a successful class action lawsuit won in February.

The top 10 single largest payouts in damages awarded for 2017 and 2018 will be to:

• California Physicians' Service, dba Blue Shield of California, for $158.9 million;
• Blue Cross and Blue Shield of South Carolina, for $132 million;
• SelectHealth, for $107 million;
• Boston Medical Center  Health Plan, dba Boston Medical Center HealthNet Plan, for $70 million;
• Common Ground Healthcare Cooperative, the lead plantiff in the case, for $56.8 million;
• Kaiser Foundation Health Plan, for $65 million;
• Oscar Insurance Company, for $55 million;
• Tufts Health Public Plans, for $53 million;
• Kaiser Health Plan of Georgia, for $51 million;
• Optima Health Plan, for $49.9 million.

WHY THIS MATTERS

Under the Obama Administration, cost-sharing reduction payments were given to insurers in the ACA market to help reduce out-of-pocket expenses such as deductibles, copayments and coinsurance for individuals who financially qualified.

Because Congress never approved the CSR funds, Republicans sued and won. The Obama Administration appealed, but under President Trump, the payments stopped.

However, insurers were still required under the ACA to offer qualifying consumers a discount. To make up for the losses, states began allowing insurers to increase premiums on silver plans in a practice known as silver loading.

As most consumers of silver plans are subsidized through premium tax credits, it was the federal government, and not most individuals in the ACA, which continued to make up the difference in CSRs.

At that time, 17 states and the District of Columbia sued to get the CSRs, but then requested a stay to avoid having the federal government put an end to the successful silver loading, according to the February court ruling.

Silver loading continues for 2020 plans.

THE LARGER TREND

Congress's failure to include any appropriating language in the Affordable Care Act does not reflect congressional intent to preclude liability for cost-sharing reduction payments, Judge Margaret Sweeney ruled in February.

On October 22, the United States Court of Federal Claims ruled that $1.587 billion be paid to the CSR class members.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com