The federal health insurance exchange, the primary vehicle for a key component of the Affordable Care Act, went live on Oct. 1, 2013. President Donald Trump has threatened to cut off subsidies to insurance companies. Image courtesy of Healthcare.gov
Aug. 15 (UPI) -- Insurance premiums through the Affordable Care Act would rise 20 percent and more Americans would go without any available plans if President Donald Trump ends subsidies to insurance companies, according to a Congressional Budget Office report Tuesday.
The CBO's report estimated 1 million more Americans would be without health insurance next year if Trump ends the payments. The number of people uninsured would be slightly higher in 2018 but a little lower starting in 2020.
The agency estimates about 5 percent of people would live in areas that would have no insurers offering plans if the insurance payments are dropped. By 2020, however, most people would be able to buy such plans as the market stabilizes, the CBO estimates.
Cutting the insurance payments would increase the federal deficit by $194 billion from 2017 through
2026, the CBO said. Although less money would be spent on the payments to insurers, the government would be required to spend even more money to offset the increase in premiums, the CBO said.
More than 7 million low- and middle-income customers qualify for assistance under the ACA, also known as Obamacare, for discounts on their deductibles, co-payments and other out-of-pocket health costs. The insurers improve the plans with the payments.
The government is mandated to offer financial assistance for the premiums of ACA customers who earn 100 percent to 400 percent of the federal poverty level.
The cost-sharing reduction payments to insurers are not guaranteed by the ACA.
The federal government is projected to spend about $10 billion in subsidies to insurers in 2018.
Trump must decide by early next week whether to make next month's subsidy. After the Republicans failed to repeal and replace Obamacare, Trump threatened to end the assistance to insurers.
He posted on Twitter on July 29, saying "If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!"
Without the insurance payments, gross premiums for silver plans would rise 20 percent in 2018 and 25 percent higher by 2020, according to the CBO. Silver plans are the third-highest tier behind platinum and gold but ahead of bronze. Unlike the gold and platinum, the silver has a deductible.
The Kaiser Family Foundation found that "the average deductible is reduced to $809, a savings of $2,800" each year by the subsidies for people who earn 150 percent to 200 percent of the federal poverty level.
Insurers have warned premiums will rise heavily to make up for the loss of the subsidies and they would leave some markets. As it is, some markets in the nation already have no insurers.
In April, Kaiser determined ending the cost-sharing reduction payments would lead to an extra $12.3 billion in other Obamacare costs in 2018. Also, the government would add $2.3 billion to its current budget deficit from such a decision.
Trump has continued to make the payments, despite a pending federal lawsuit Republican House leaders filed to question the legality of the assistance.