Republican Health Reform Bill Could Bring Down Premiums 25 Percent By Adding Stabilization and Innovation Grants

Monday, March 13, 2017 General News
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Adding Funds to "Insurance Premium Stabilization" Portion of AmericanCare Could Make Big Difference for Consumers

FERGUS FALLS, Minn., March 13, 2017 /PRNewswire-USNewswire/ -- Today Communicating for America (CA) called on Congress

to provide "stabilization funds" in the recent Republican-introduced American Health Care Act reform legislation. As noted in a study released last week by the Council for Affordable Health Care (CAHC), an increase of $9 billion in stabilization funding could reduce health insurance premiums by 25 percent for consumers in the next open enrollment period.

The CAHC report on the Impact of Stabilization Funding on ACA Premiums and Subsidies outlines how added funding could eliminate or greatly reduce the cost of health insurance, bringing the price of premiums back to 2016 levels or lower.

Earlier this year the Department of Health and Human Services (HHS) announced health insurance premiums rose 25 percent for 2017. But when premiums increase, so do tax credits, also known as subsidies, to help curb the cost of health insurance for those who qualify for income-based cost assistance. For individuals and families that make above the income threshold to qualify for cost-relief, the increases in insurance costs hit nothing but their wallets.

The CAHC report outlines that federal costs of Affordable Care Act (ACA) tax credits are projected to total $38 billion in 2017, $48 billion in 2018, and $56 billion in 2019. The analysis suggests that funding state-based innovation grants at the cost of $9 billion could bring the price of the benchmark silver plan down by nearly 25 percent and reduce subsidy outlays. This reduction in premiums would correspondingly reduce the outlay for tax credits or subsidies.

"Although the Republican proposal is far from perfect, it is a good start that demonstrates health insurance costs could go down dramatically for individuals if a new law creates the right level of premium stabilization funding," said Jeff Smedsrud, Chief Executive Officer of Communicating for America.   

He noted that if insurance companies are able to reduce rates because of increased stabilization funding, it would mean more consumers would buy health plans, and the insurance companies would return to normal profitability margins.

"Lower premiums reduce the amount of federal subsidies individuals receive, proportionate to their income - nearly a one-to-one offset of the $9 billion that would be spent. For those who do not qualify for premium subsidies, a 25 percent reduction in premium would lead to real economic savings. A more robust marketplace in the upcoming Open Enrollment Period could create the needed stability for individuals to restore confidence. The most important thing that can happen for consumers and insurance companies in 2017 is for both to regain confidence," said Smedsrud.

About Communicating for AmericaCommunicating for America, Inc. (CA) is a nationwide nonprofit, nonpartisan organization that represents about 100,000 small businesses, self-employed and agricultural members across America. Since 1972 CA has been working on small business, tax, healthcare and agricultural policy issues on behalf of its members. For more information visit

For more information contact: Colleen McGuire |  651-338-8822  |


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SOURCE Communicating for America


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