House GOP bill: No tax credit extension after all; CBO projects *another* 300K to lose coverage due to end of Silver Loading in mostly red states

Welp. In a development which should surprise absolutely no one, GOP House Speaker Mike Johnson has announced that the bipartisan "Fitzpatrick Bill" which would include a 2-year extension of the enhanced ACA tax credits (albeit with significant caveats) won't be included in their healthcare bill vote this week after all.

Via Politico:

Speaker Mike Johnson confirmed Tuesday he will not allow a House vote this week to extend expiring Obamacare subsidies — a reversal from last week when a GOP leadership aide said the process “would allow” for an amendment vote.

“In the end, there was not an agreement,” Johnson told reporters, noting the divides in his conference over the subsidies.

Meanwhile, the main House GOP bill (which doesn't include any tax credit extension) will move forward anyway...and the Congressional Budget Office has published their official ten year score of the budgetary & insurance coverage impact of the bill:

H.R. 6703 would establish new rules for association health plans, modify requirements for individual and group health coverage, require contracts between plan sponsors and pharmacy benefit managers (PBMs) to meet certain standards, and appropriate funding for reductions in cost sharing. CBO and the staff of the Joint Committee on Taxation (JCT) estimate that enacting the bill would reduce the deficit by $35.6 billion over the 2026-2035 period. CBO estimates that enacting the bill would decrease the number of people with health insurance by an average of 100,000 over the 2027-2035 period and reduce gross benchmark premiums by 11 percent, on average, through 2035.

Those last two points (100K losing coverage & gross benchmark premiums dropping 11%) come with some major caveats, however; read on...

As I noted in my writeup on both bills last week:

• Association Health Plans have long been rife with fraud and abuse which have left employers and employees with hundreds of millions of dollars in unpaid medical bills

The CBO projects that this provision of the main House GOP bill would shift around 500,000 people from fully regulated small group coverage into poorly regulated association plans. They also assume that perhaps 200,000 currently uninsured people would gain this type of "coverage" which I guess is supposed to be considered a good thing.

• Stop-Loss Insurance: The House GOP bill would strip stop-loss policies from being definied as "health insurance" which means it could no longer be regulated by (or have cases of fraud investigated by) state insurance regulators. It would even trump (pun intended) state laws on this type of coverage.

The CBO thinks this wouldn't have much impact on the federal budget one way or the other.

• Codifying ICHRA/CHOICE Plans: The House GOP bill would codify Individual Coverage Health Reimbursement Arrangement plans (ICHRAs) into law, while also changing the branding to Custom Health Option and Individual Care Expense (CHOICE) plans.

As I said last week, ICHRA/CHOICE is one of the few half-decent ideas which came out of the Trump 1.0 Admin; I'm pretty much neutral on them. The CBO doesn't think this would have much impact one way or the other on the budget or overall coverage.

• Oversight of Pharmacy Benefit Management Services (PBMs): I didn't have much to say about the PBM provision last week as I don't know that much about them, but here's what the CBO has to say:

Section 201 would require PBMs to disclose certain types of information to group health plans. For employers and plans with 100 or more employees or participants, PBMs would be directed to disclose data related to enrollees’ use of prescription drugs, along with costs, rebates, fees, and cost-sharing amounts, to the group health plans. PBMs would be required to disclose only a subset of that information (excluding information related to the use and costs of specific prescription drugs) to group health plans with fewer than 100 participants that insure employers with fewer than 100 employees.

CBO expects that, in some cases, prescription drug costs would be reduced if private payers had more complete information about the operations of their PBMs, including the net drug prices that PBMs negotiate with drug manufacturers and pharmacies. CBO estimates that the reduction in drug costs would cause premiums charged in the group health insurance market in the first full year of implementation to fall by less than 0.1 percent, on average, and expects that those savings probably would erode over time. By 2035, CBO estimates, average premiums charged in the private insurance market would be less than 0.05 percent lower than under current law.

CBO and JCT estimate that enacting section 201 would increase federal revenues by $1.8 billion and decrease direct spending by $22 million, for a net decrease in the deficit of $1.9 billion over the 2026-2035 period.

Basically, this would be nominal/token oversight of PBMs without accomplishing much of anything.

Finally, we get to the only one of the 5 provisions in the House GOP bill which would directly impact ACA enrollees:

• Appropriating Cost Sharing Reduction (CSR) reimbursement payments

As I explained last week, this is the latest twist in an absurd saga which has dragged out for nearly 12 years now, and the bottom line is that House Republicans are now fighting to RESTORE the very thing that they sued the Obama Administration to END in 2014.

The very short version is that Donald Trump & House Republicans hoped that ending CSR reimbursement payments would damage the ACA, but instead, thanks to state insurance regulators & insurance carriers making changes to how ACA policies are priced in response, it ended up strengthening the ACA markets via something called Silver Loading.

You can read the rest of my explainer here, but the end result of Silver Loading has been the following:

• GROSS premiums for SILVER plans went up dramatically. HOWEVER...
• NET premiums for BRONZE, GOLD (and even PLATINUM) plans dropped dramatically as well, AND...
• Premium SUBSIDIES (tax credits) also increased significantly...and since those can be applied towards non-Silver plans...
• MILLIONS OF SUBSIDIZED ENROLLEES found themselves able to get GOLD plans for the same or even lower cost than SILVER plans, and many could even get BRONZE plans for dirt cheap or no premium cost at all.

So, what would appropriating the CSR payments (as House Republicans are trying to do in this bill) actually do?

It would reduce gross benchmark premiums by around 11% or so...but it would also substantially reduce premium tax credits while also making Bronze, Gold & Platinum plans cost far more.

Also, the ~11% gross benchmark premium drop would be relative to the 26% average gross premium increase for 2026. Gross premiums would still be ~12% higher than they are in 2025 even if the 11% drop applied to all plans, which it wouldn't.

Here's a breakout of current ACA exchange enrollment by metal level and income bracket...

...and here's the same table with the enrollees currently helped by Silver Loading (in yellow) vs. those who would be "harmed" by it (in green). And again, the only reason they'd be harmed at all is if the enhanced subsidies end, since that would cut everyone earning over 400% FPL from any subsidies at all:

In other words, funding CSR reimbursement payments would slightly help a few hundred thousand middle-class enrollees (who only need the help because of the enhanced tax credits expiring to begin with) while significantly harming over 5.7 million lower-income enrollees in the process.

 

BUT WAIT, THERE'S MORE!

If you read the very last paragraphs of the bill itself (the section on CSR reimbursement payments), you'll notice that it would prohibit CSR reimbursement payments from being made to...

...a qualified health plan that provides health benefit coverage that includes coverage of abortion.

The reason Republicans are including this language is, of course, because they want to be absolutely certain that no federal dollars are going towards coverage of abortion.

Except that there's a dozen (blue) states which require abortion to be covered by all major medical policies.

Which means that under this bill, ironically, Silver Loading would continue to help hundreds of thousands of Bronze, Gold & Platinum enrollees in those states while it would end in every red state (as well as purple states & the remaining blue states).

My best estimate from last summer (when this provision was almost included in the Big Ugly Bill before being stripped out at the last minute) was that roughly 18x as many ACA enrollees living in red states would be harmed by it than in blue states.

Gotta love the irony.

And yes, the CBO even addresses this directly, noting that:

...Section 202 would appropriate funds for payments to reduce cost sharing and allow those payments to be made only for plans that limit any coverage of abortion services to when it is necessary to save the life of the mother or when a pregnancy is the result of rape or incest.

Because insurers must still offer cost-sharing reductions, and they bear that cost even without a direct payment from the government, most cover the costs by increasing premiums for silver plans offered through the marketplaces. That practice, called silver loading, results in a larger premium tax credit under current law because the credit is tied to the second-lowest-cost silver plan. The premium tax credit covers a greater share of premiums for enrollees in non-silver plans and, in CBO’s estimation, primarily increases enrollment among people whose income is between 200 percent and 400 percent of the FPL. Silver loading would end if insurers were compensated for cost-sharing reductions through an appropriation, thereby reducing gross premiums for silver plans and reducing the premium tax credit.

CBO expects that enacting section 202 would end silver loading in the states where roughly 75 percent of marketplace enrollees reside. Because some states mandate coverage of certain abortion services, and marketplace plans still must offer cost-sharing reductions, CBO projects that the other 25 percent of enrollees would live in states where silver loading would continue, consistent with current conditions.

In the absence of silver loading, CBO projects, enrollment would decline primarily among people whose income is between 200 percent and 400 percent of the FPL because the premium tax credit available to them would cover a smaller share of premiums for non-silver plans than under current law. CBO estimates that enacting section 202 would reduce the nation’s gross benchmark premium by 11 percent and increase the number of people without health insurance by 300,000, on average, per year over the 2027-2035 period.

CBO and JCT estimate that enacting section 202 would decrease federal deficits, on net, by $36.7 billion over the 2026-2035 period. That decrease is driven by a reduction in the premium tax credit of $131.1 billion and an increase in outlays for cost-sharing reductions of $91.8 billion, partially offset by $2.6 billion in other effects.

In other words, 300,000 people, the vast majority living in red states, would lose healthcare coverage due to Congressional Republicans ending Silver Loading.

Note: It's important to understand that this would be in addition to the 4 million or so folks who the CBO thinks will lose coverage due to the expiring tax credits.

Of course, if this ever were to actually pass & be signed into law, you can be certain that the Trump Regime and Congressional Republicans would do everything they can to separately prohibit Silver Loading in all states in an attempt to force those dozen blue states to remove their coverage requirements (or face their ACA marketplaces drying up as carriers fled them since they'd no longer have any way of being reimbursed for covering CSR expenses).