It has come to our attention that after seven years of fighting against the Affordable Care Act and promising to repeal and replace it, many Republicans have absolutely no clue how any part of the law works. Even Sen. John Thune (R-SD), who is in Republican leadership admits it. “There is a lot of misinformation out there,” he says, while conceding that the payments to insurers Donald Trump has ceased are not a bailout and do indeed save the federal government money.
Trump is particularly fond of calling these payments bailouts, and pretty much any Republican commenting on them will say the same thing. Here’s the deal. They’re not. A bail-out is when the government has to stop in to save a company or an industry from bankruptcy. These payments aren’t that. They’re reimbursement for insurance companies who are required by law to help out lower-income customers in their Obamacare plans with their deductibles and co-payments. That’s part of the “affordable” in the Affordable Care Act. They’re making health insurance cheaper so that more people—7 million people currently, about 58 percent of the Obamacare enrollment—can afford it.
Here’s how it works. People who have incomes of 100 to 250 percent of the poverty level (just under $25,000 for individuals and $62,000 for a family of four) and who buy the standard silver plan can get the assistance. The subsidies are only available on the silver plans, the solid, middle-of-the road plans that the law sets as the benchmark. These plans pay 70 percent of covered medical costs for consumers, and the premium set for the second cheapest silver plan is the amount used by states to serve as the basis for premium subsidy calculations. These are the only plans in which enrollees can get both CSR subsides and premium subsidies. The CSRs, again, are paid by the insurance company.