CBO: End of payments to health insurers would cause premiums to rise

The Congressional Budget Office reported this week that premiums for a popular type of individual health care plan under the Affordable Care Act would rise sharply, and that more people would be left without options for coverage, if Trump kept his threat to stop the payments. The CBO analysis was requested by House Democratic leaders. People would be knocked off coverage or suddenly find it affordable; millions of people could shift how they get coverage, from whom and where, and companies would be in turmoil redoing their coverage areas and plans.

Josh Gottheimer (D-5th Dist.) and Leonard Lance (R-7th Dist.), both of whom opposed the Republican repeal effort, have offered their own solutions to fix the health care law. It would not cause a lot of people to lose insurance, the CBO calculates; it would instead mean the government would have to pay more in tax credits as more people would qualify for direct subsidies or people whose insurance is already subsidized would qualify for larger benefits. "The agency said many states are now requiring companies to file their rates for 2018 on the assumption that they won't be reimbursed".

Andy Slavitt, who served as Acting Administrator for Medicare and Medicaid under President Barack Obama, called the potential impact on Americans "devastating" and tweeted that the CBO's analysis leaves Trump with no choice but to continue the payments.

The federal deficit would increase as more people relied on subsidies to access insurance: The federal deficit would increase by $194 billion between 2018 and 2026 compared to the current baseline. As of now, the government is making funding decisions on a month-to-month basis. The president has repeatedly said he will withhold the payments, known as cost-sharing reductions, calling them a "bailout" for insurance companies.

CBO: End of payments to health insurers would cause premiums to rise
CBO: End of payments to health insurers would cause premiums to rise

First, he can cease certain payments that insurers are expecting. With subsidies shooting up, the CBO finally concludes that about a million more Americans will end up insured than if Trump hadn't tried to bring the market crashing down.

Covered California is referring the to the plan as an initiative to address market uncertainty over the actions that might be taken by the Trump administration and the courts. Yet he thinks Congress should approve the payments through 2018 as part of a market stabilization he will present to his panel in September. Lamar Alexander, R-Tenn., chairman of the Health, Education, Labor and Pensions Committee.

Insurance companies are required to offer the reduced-cost silver plans whether or not the government compensates them, so if the subsidy money suddenly vanishes, they'll be on the hook for the difference.

"Such estimates are inherently imprecise because the ways in which federal agencies, states, insurers, employers, individuals, doctors, hospitals and other affected parties would respond to the changes made by this policy are all hard to predict", the CBO report states.


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