More on Reimbursement

ACAP wants Supreme Court to rule for full coverage of cost-sharing reduction payments

The federal government claims insurers are being funded through a practice of raising premiums known as "silver loading."

Susan Morse, Managing Editor

U.S. Supreme Court building (Getty Photo by Mike Kline)U.S. Supreme Court building (Getty Photo by Mike Kline)

This week, the Association for Community Affiliated Plans filed an amicus brief backing Maine Community Health Options and Community Health Choice in their request to the Supreme Court to review a lower court's decision on cost-sharing reduction payments.

ACAP wants insurers that offer health plans in the Affordable Care Act marketplace to get the CSRs, as promised under the ACA.

While an appeals court ruled the government should pay the promised CSRs, it also indicated the government doesn't owe the money because insurers are otherwise funded through a practice of raising premiums on silver level plans, known as "silver loading."

"That is the crux of the appeal to the Supreme Court," said ACAP CEO Margaret Murray.

CSRs and silver loading are two separate payment mechanisms, Murray said.

Insurers are looking for the Supreme Court to say that they are owed the CSR payments in full, said Heather Foster, vice president for marketplace policy at ACAP.

Maine Community Health Options and Community Health Choice brought the case to the Supreme Court in February. The Department of Justice has until the end of April to file its response.


At stake is hundreds of millions, if not billions, of federal dollars that are owed to insurers, according to ACAP.

Cost-sharing reduction payments are still not being funded and silver loading is ongoing on a state-by-state basis.

The ACA requires insurers provide cost-sharing reductions to consumers with incomes below 250% of the federal poverty level who enroll in silver-tier marketplace plans. But while the federal government no longer provides reimbursement, insurers must still provide CSRs to eligible consumers who enroll. 

Insurers offering plans in the ACA market make up the difference through silver loading. Most consumers don't pay more, because premium tax credits are based on silver-tier premiums. The government ends up subsidizing the silver loading of premiums.

"[D]espite the statute's unambiguous language, the government has now refused for several years to make billions of dollars of cost-sharing reduction payments to which insurers are entitled under the terms of the ACA," ACAP's brief states. "This is no way to run a public-private partnership, let alone one as consequential as that created by the ACA."

ACAP is hopeful, as in another Supreme Court case on ACA risk corridor payments, the Justices mandated the government pay back the money owed.


In October 2017, the Trump administration announced it would stop paying insurers cost-sharing reduction payments.

In August 2020, the U.S. Court of Appeals for the Federal Circuit affirmed a 2019 court order requiring the federal government to reimburse insurers for cost-sharing reduction payments that were provided in the Affordable Care Act. 

Twitter: @SusanJMorse
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