• Today’s interview, basically: CSR edition

    Hypothetical discussion with a journalist:

    Q: If the federal government doesn’t pay the cost sharing reductions, consumers that rely on them are screwed, right?

    A: No, insurers have to pay them anyway.

    Q: <surprise> Oh! Well, then insurers are screwed, right?

    A: Not necessarily. They could raise premiums to cover the costs.

    Q: <insight> Ah ha! But, then consumers are screwed, yes?

    A: Some could be, yes, those that aren’t protected by premium tax credits. But those who get those credits are protected from premium increases.

    Q: <scratches head> Umm, so almost nobody is worse off?

    A: Well, like I said, those who aren’t protected by premium tax credits could pay higher premiums. But there is actually a scenario under which they aren’t worse off, and could be better off. It’s tricky, so I won’t go into it here. Go talk to Charles Gaba. But also keep in mind, since premiums go up, so do the tax credits, which the government pays.

    Q: But the government saves money in the end because of not paying cost sharing reductions, right?!

    A: No, the premium tax credit increases are larger than the cost sharing reductions savings. The government pays more, so taxpayers are worse off.

    Q: <OMG face> So this doesn’t even save money?! Ooookaaaayy, but it does cause some turmoil in the markets, right?

    A: Yes, it could. But there will be lawsuits. A very likely consequence is that the government ends up paying for the cost sharing reductions anyway. And, in the meantime, an immediate injunction could be granted to keep the cost sharing reduction payments flowing.

    Q: <faceplam face> So all of this could end up leading to … literally no change for anybody?

    A: Yeah, that sounds about right.

    Q: <gobsmacked silence>

    @afrakt

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