Published: Thu, August 17, 2017
World | By Paul Elliott

Obamacare Could See Premiums Leap 20 Percent If Trump Halts Payments

Obamacare Could See Premiums Leap 20 Percent If Trump Halts Payments

To map out the consequences of one possible move by the administration, the CBO examined what would happen if federal officials announced at the end of August that they would continue CSR payments through the end of the year but discontinue them after that. "The number of people uninsured would be slightly higher in 2018 but slightly lower starting in 2020", it said.

The final deadline for insurers to file rate requests or adjustments for 2018 in many states was pushed back to September, as uncertainty over both health care policy and the future of the key ObamaCare subsidy payments unnerves health companies deciding whether to continue offering plans on the federal marketplace and what to charge for them.

POSTSCRIPT: The cynic in me thinks that once Republicans understand what the CBO report actually says, they will suddenly get very enthusiastic about reinstituting CSR subsidies.

The CBO estimated the federal deficit would increase by $194 billion from 2017 through 2026 if the payments are terminated. Participating insurers must pay customers' costs whether or not they're reimbursed by the government, so their bottom lines are at stake.

"Without payment of these cost-sharing reductions, Americans will be hurt", Alexander said this month.

The federal government is projected to spend about $10 billion in subsidies to insurers in 2018.

For months, Trump has dangled the possibility that he may stop the payments, which he calls "bailouts for insurance companies", as a tactic to force Democrats to the negotiating table.

The subsidies are snared in a legal dispute over whether the Obama health care law properly approved the payments to insurers.

President Trump has sometimes falsely described the payments as a bailout to insurance companies. Silver plans are the third-highest tier behind platinum and gold but ahead of bronze. In other words, for some consumers, gold plans could be cheaper than silver plans. It also found that premiums would be 25 percent higher by 2020, which would increase the amount of government-provided tax credits to help shield low-income people from premium increases.

"If the market does collapse, that's going to be a reflection of a choice the administration has made", Matthew Fiedler, a fellow at the Center for Health Policy at the Brookings Institute and former chief economist for Obama's Council of Economic Advisers, said in a July interview.

Hundreds of USA counties are at risk of losing access to private health coverage in 2018 as health insurers consider pulling out of those markets in the coming months.

Trump has held out these payments as political bargaining leverage, warning that if Congress did not act to repeal and replace the law, he would end the payments, and Obamacare would implode. Also, the government would add $2.3 billion to its current budget deficit from such a decision.

President Trump had periodically threatened to stop the payments as a way to highlight what he said were the ACA's defects, and to pressure Congress into passing ACA repeal legislation.

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