CBO Finds Repeal of ACA Will Cost $137 Billion and Increase Uninsurance by Millions
The Congressional Budget Office (CBO) issued a report finding that repeal of the Affordable Care Act would add $137 billion to the federal deficit over 10 years. This estimate takes into account the net effects of the direct impact on federal revenues and spending that would increase the deficit by $353 billion, and the increase in economic output, which would reduce the federal deficit by $216 billion mainly through increasing the labor supply as consumers lose coverage. Additionally, the report estimates that the number of uninsured would increase by 19 million by 2016—and by 24 million through 2025.
Increase in Funding for Reinsurance Program Announced
CMS announced that it is increasing funding for insurers participating in Marketplaces that cover high cost enrollees. The reinsurance program for 2014 will increase the coinsurance rate on reinsurance payments to 100% of eligibility claims, up from 80% the previous year. The increase in funding is a result of lower-than-anticipated requests for reinsurance payments during the 2014 benefit year. Issuers will receive payments in August 2015.
OIG Questions CMS’ Internal Controls for Marketplace Financial Payments
The Department of Health and Human Services (HHS) Office of Inspector General (OIG) published a report finding that CMS lacked internal controls to ensure the accuracy of nearly $2.8 billion in aggregate financial assistance payments to insurers on the Federally-facilitated and State-based Marketplaces. The report indicates that during the first four months of 2014, CMS relied on information it received from issuers to identify cost-sharing reduction payment rates, and did not have systems in place to ensure that financial assistance payments were made in the correct amounts or more confirmed enrollees. The report recommends fixes, including implementing computerized systems to maintain enrollee and payment information. CMS plans to implement a permanent process to authorize payments by late 2015 and generally agreed with the recommendations in the report, but noted that some were no longer applicable because of regulatory action and that internal and external reviews by an independent accounting firm found no significant issues with its processes.