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CA Department of Insurance

Commissioner Jones urges Senate to fund Cost Sharing Reductions to stabilize health insurance market

News: 2017 Press Release

For Release: September 7, 2017
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Commissioner Jones urges Senate to fund Cost Sharing Reductions to stabilize health insurance market
Insurance Commissioner Dave Jones writes letter to Senate leaders holding hearing

SACRAMENTO, Calif. — Insurance Commissioner Dave Jones wrote Senator Lamar Alexander and Senator Patty Murray of the U.S. Senate Committee on Health,Education, Labor, and Pensions about the lack of stability in the individual health insurance market created by the uncertainty surrounding continuation of the Cost-Sharing Reduction payments (CSRs) provided for in the Affordable Care Act and actions taken by the Trump Administration such as reduced enforcement of the individual mandate.

"I urge Congress to take immediate action to provide stability in the marketplace by enacting legislation to require and provide continued funding for Cost-Sharing Reductions for, at minimum, the rest of the 2017 policy year and the entirety of the 2018 policy year," wrote Commissioner Jones.

A matter of vital importance to the stability of the individual health insurance market is an ongoing commitment to fund the CSRs assistance included in the Affordable Care Act. Approximately half of the 1.3 million Californians who receive Advance Premium Tax Credits through Covered California also rely upon CSRs to afford the health care covered by their health insurance policies.

Due to the uncertainty regarding ongoing CSRs assistance, earlier this year, Commissioner Jones took the unprecedented step of authorizing California health insurers to file dual rate submissions, one that reflects certainty in CSRs funding, and another that reflects the additional premium loads that will result from uncertainty regarding the funding. In California, the rate increases for Silver plans that will result if the Senate fails to fund the CSRs this month, are 12.3 percent higher on average than if the CSRs called for in the ACA are funded.

"We have reached the eleventh hour when you must act to fund the CSRs or it will be too late to prevent double digit premium increases because the rates for 2018 must be finalized before the end of this month," added Jones.

To prevent destabilization of the individual health insurance markets throughout this country, Commissioner Jones is urging the Senate to immediately fund the CSRs for the rest of 2017 and for the 2018 policy year, reinstitute and fund a federal reinsurance program, and consider extending the premium tax moratorium. If the Senate acts before the end of this month to fund the CSRs, insurers are more likely to stay in the market in 2018 and are able to forgo the significant premium increases filed with the department and state regulators throughout the country associated with covering the costs of the CSRs.

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Media Note:

  • Read Commissioner Jones' full letter to Senators here.

The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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