The Implications of a Finding for the Plaintiffs in House v. Burwell

In 2016, the case House v. Burwell will be decided in the United States district court of the District of Columbia. In this case, the House of Representatives claims that the cost-sharing reductions (CSRs) the Obama administration paid to low-income enrollees (those with incomes below 250 percent of the federal poverty level [FPL]) in Marketplace coverage were inappropriate because Congress had not made a specific line-item appropriation to do so. We use the Urban Institute’s Health Insurance Policy Simulation Model (HIPSM) to estimate the ramifications of eliminating federal reimbursement of CSRs. Given that the Affordable Care Act (ACA) requires insurers to provide low-income Marketplace enrollees with the reductions regardless of explicit funding, we assume that insurers would build the costs associated with them into the premiums for Marketplace silver plans (those with 70 percent actuarial value).