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President Trump announced on October 12, 2017, that his administration will not be making any more CSR payments.

What are Cost Sharing Reductions (CSRs)?
CSR’s are payments from the government to the insurance companies which are designed to help health insurance plans offer lower co-pays and deductibles. This is a benefit subsidy for low-to-middle income individuals and families when they buy health insurance through the Covered California marketplace.

CSR’s are different from the Advance Premium Tax Credit (APTC), which are premium subsidies.  The APTC is a federal subsidy for low-to-middle income individuals and families. This subsidy helps to pay part of your monthly health insurance premiums in order to make your insurance more affordable.


What will happens now?
At this time, President Trump’s decision will not affect open enrollment for 2018, the Affordable Care Act and all of its regulations, penalties and enforcement remain the law of the land.


Covered California Silver Plan Surcharge
Over the past several months, Covered California has been issuing alerts to the health insurance world, that there may be a 12.4 percent CSR surcharge on silver plans purchased through Covered California, if nothing at the federal level occurred to stabilize CSR payments to plans.

The warning became reality when Covered California announced on October 11, 2017, that they are officially adding the 12.4 percent surcharge due to failure at the federal level to provide certainty regarding the future of CSRs. Covered California Silver plans were already looking at a 12.4 premium increase for 2018 policies. With the additional 12.4 percent, Covered CA 2018 Silver Plan premiums will increase 25 percent overall.

It is important to note that the surcharge only impacts silver-level plans sold by Covered California. The surcharge does not affect other Covered California metal tiers, or any plans offered outside of Covered California.

If you have any questions, please know that we are here to help at 800-400-6633.