Cost sharing reductions subsidy

The nature of the subsidy as discretionary spending (i.e., subject to annual appropriation by Congress) versus mandatory (i.e., paid automatically to eligible parties) was challenged in court by the Republican-controlled House of Representatives in 2014, although payments continued when the ruling in favor of the GOP was appealed by the Obama administration.

[2] The CSR subsidies were paid to insurance companies to reduce co-payments and deductibles for a group of roughly 7 million ACA enrollees in 2017, those earning 100%-250% of the federal poverty line (FPL), about $12,000 to $30,000 for an individual and $24,000 to $60,750 for a family of four.

Republicans in the U.S. House of Representatives sued the Obama administration in 2014, alleging that the CSR subsidy payments to insurers were unlawful because Congress had not appropriated funds to pay for them.

CBO expected the exchanges to remain stable (i.e., no "death spiral" before or after Trump's action) as the premiums would increase and prices would stabilize at the higher (non-CSR) level.

Another 13 million who are covered under the ACA's Medicaid expansion (in the 31 states that chose to expand coverage) should not be directly affected by Trump's action.

[1][4] Based on Trump's threats to end the CSR payments during early 2017, several insurers and actuarial groups estimated this resulted in a 20 percentage point or more increase in ACA exchange premiums for the 2018 plan year.

[7] The Kaiser Family Foundation reported in April 2017 that ending the CSR payments could result in many insurers exiting the ACA marketplaces and those that remain could raise premiums around 19 percentage points.