The subsidies reduce the amount such customers have to pay in out-of-pocket costs when they go to the doctor or hospital, are prescribed medications, or receive other health services. The rates are worth an estimated $7 billion to insurers nationally this year.
The announcement comes amid uncertainty over whether Congress and the Trump administration will cease paying the CSRs.
The Republican-controlled House of Representatives several years ago sued the Obama administration, saying the CSRs should not be paid to insurers because Congress never appropriated the money for them.
But the federal government kept paying insurers for the CSRs as the case continued in a federal court, and even after a judge ruled in the House’s favor. The judge’s decision was stayed pending an appeal by the Obama administration.
The inauguration in January of President Donald Trump, an avowed opponent of Obamacare, raised the possibility that he would order the Justice Department to drop defense of the court case, and stop paying the CSRs.
But instead, the administration and the House have agreed to stay the appeal of the case, while they discuss a possible resolution of the case.
That agreement, on its face, may seem perplexing, because both Trump and House Republicans have long campaigned against Obamacare. But the agreement reflects concerns that eliminating the CSRs would harm insurance companies, and then would hit consumers’ pocketbooks when insurers raised prices in reaction. This could possibly lead to political backlash for Republicans.
However, Trump has publicly said he might cease funding the CSRs. His proposed budget for next year calls for continuing to fund the subsidies until the court case is resolved.
Watch: Obamacare architect offers prescription for uncertainty