Premiums would rise and the federal deficit would increase if the Trump administration ends payments to health insurers that subsidize out-of-pocket costs like deductibles for lower-income customers, the nonpartisan Congressional Budget Office said Tuesday.
Most people buying insurance sold on the health care exchanges created by the Affordable Care Act would pay a similar monthly cost to what they pay now despite an initial increase in premiums of about 20%. But that’s because the federal government would be picking up the expected increase in higher premiums through a different subsidy in the law.
The effect would increase federal deficits by $194 billion over 10 years, CBO said.
The number of people without insurance would initially increase but would be slightly lower in two years than what's projected without any changes.
The analysis was conducted at the request of congressional Democrats who have urged he Trump administration to continue the cost-sharing subsidies.
Subsidies, which reduce the cost of deductibles, co-payments and other out-of-pocket expenses, are available to those earning up to about $30,150. Over half of the more than 12 million Americans using the marketplace because they don’t get coverage through a job or a government program like Medicaid or Medicare qualify for the subsidies.
But although the ACA requires insurers to provide the discounts, congressional Republicans previously argued in court that the Obama administration could not reimburse insurers unless Congress included the funding in an annual spending bill. After a federal judge last year sided with Republicans, the subsidies have been in limbo while the Trump administration decides how to proceed.
Some key GOP lawmakers have backed continuing the subsidies through at least next year to keep insurers from raising rates or exiting the exchanges. But Congress is running out of time to act before 2018 rates are set.