Federal deficit will soar to $194 billion, premiums spike 20% if Trump nixes cost-sharing subsidies, CBO report says
Number of people uninsured would be slightly higher in 2018 but slightly lower starting in 2020, report also says.
The federal deficit will soar by $194 billion over the next nine years and gross premiums for silver plans, the most popular, would spike 20 percent higher in 2018 and 25 percent higher by 2020 if President Trump follows through a proposal to eliminate the cost-sharing subsidies that allow low-income consumers to purchase and afford health plans on the individual ACA insurance exchanges, a report from the Congressional Budget Office said.
The report was commissioned by House Democratic leaders.
The Affordable Care Act requires insurers to offer plans with reduced deductibles, copayments, and other means of cost sharing to some of the people who purchase plans through the exchanges, with those reductions hinging on consumers' incomes. For their part, insurers receive payments directly from the government to fulfill that ACA requirement and help cover out-of-pocket costs like deductibles and co-pays for those earning between 100 and 250 percent of the federal poverty level who choose a silver plan. The tax credits consumers receive are separate from the CSRs in jeopardy under Trump's proposal to stop paying them after December 2017.
[Also: CMS extends ACA premium rate filing deadline due to change in CSR risk adjustment methodology]
If CSRs are lost, insurers will likely raise premiums to cover the costs, causing a potential shift in what plans become the most popular. Other plans will see little or no premium increases, and consumers might actually find better deals on similar coverage with other plans, the CBO report said.
Specifically, gross premiums for silver plans would rise 20 percent in 2018 and 25 percent by 2020. However, the CBO said premiums for gold and bronze plans would not. For those consumers getting higher tax credits, they might choose to apply them to a gold plan which provides a higher percentage of the plan value. Costs for those getting subsidized coverage wouldn't see much change because the loss of CSRs would be shouldered by the federal government in the form of higher tax credits.
The subsidies themselves, are also forecasted to increase, the report said, because the average amount per consumer is expected to rise, as is the number of people who would receive them, the CBO report said.
The number of uninsured people over the next decade would see little change though, CBO said. The agency predicted that insurers would raise their premiums on silver plans to make up for the loss of CSRs and that increase would mean a rise in the premium tax credits. The higher tax credits could make the marketplace plans more of a draw for lower-income Americans who aren't yet marketplace consumers, the report said.
Twitter: @BethJSanborn
