Executive Order Ends the “Out-of-Pocket” Subsidy Only; the “Premium” Subsidy Remains in Place

Some folks may think that Friday’s Executive Order did away with Obamacare subsidies altogether.  It didn’t.

There are two subsidies. One was cut.  One wasn’t.

In a nutshell, one subsidy lowers the cost of premium (aka premium tax credits) for those qualified individuals and families enrolled through the exchange and making less than 400% above the poverty level.  This stays in place.

The other covers a reduction in the out-of- pocket expenses or claims costs paid to the medical provider by the patient (aka cost-sharing reductions). This subsidy applies to those earning below 250% of the poverty level and covered by a plan issued by the insurance company through the exchange.

It’s this out-of-pocket budget appropriation that was cut by Friday’s Executive Order.

From what we hear, despite Friday’s Order most of those enrollees who qualify for the out-of-pocket assistance will continue to receive it as part of their coverage at least through 2018.  Many of the insurance carriers still participating on the exchange expected the subsidy cut and planned for it when they filed their rate increases and established their pricing for 2018.

You can read more here.



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