Cost-Sharing Reduction Payments (CSR): What Are They, And Why Do They Matter?

September 18, 2017

What are they?

Cost-sharing reduction (CSR) payments are payments from the federal government to insurers that help share the cost of health insurance.

Under the Affordable Care Act (“Obamacare”), low- and middle-income Americans receive discounted insurance premiums that lower the cost of their deductibles and co-pays.

Why do they matter?

Elimination of CSR payments could either increase marketplace spending by 18 percent or cause 9.4 million Americans to lose insurance.

The most vulnerable Americans would be affected: those whose household incomes are between 100 – 200% of the federal poverty level.

CSR and New York State

700,000 New Yorkers earn below 200% of the federal poverty level and receive the state’s Essential Health Plan.

The Essential Health Plan is funded by the CSR payments and another type of support, the premium tax credits.

For another 65,000 New Yorkers, who earn between 200 – 250% of the federal poverty level, the CSR payments help reduce their out-of-pocket costs.

Stand up for your fellow New Yorkers: tell your representatives to guarantee CSR payments and protect our healthcare.

The threat to CSR

  • If the federal government halts CSR payments, healthcare premiums will increase by 20% in 2018 and 25% in 2020.
  • Without CSR payments, that are made to health insurance companies directly, health insurers may exit the marketplace.
  • Without CSR payments, Americans will be forced to pay more for less quality healthcare.
  • According to the Urban Institute, as many as 9.4 million Americans could lose insurance by 2018.