Trump ending ObamaCare subsidies would send premiums soaring: CBO

Eliminating Obamacare Subsidies Would Up Premiums by 20 Percent CBO

Eliminating Obamacare Subsidies Would Up Premiums by 20 Percent CBO

The immediate aftermath of Trump's decision to halt payments could devastate a million or more who receive subsidies. Trump has said voters would blame Democrats for any problems with the markets, but few Republican elected officials share that view.

The subsidies themselves, are also forecasted to increase, the report said.

But the reason that the future of the payments is uncertain is that they are the subject of a legal dispute left over from the Obama era. The payments had been made illegally.

Last year, about 85 percent of people who bought Obamacare insurance got a tax credit, according to the Centers for Medicare and Medicaid Services.

A White House spokesman says Trump is "working with his staff and his Cabinet to consider the issues raised by the CSR payments".

In California, more than half of the 1.4 million residents who buy health insurance on the state exchange, Covered California, make use of the cost-sharing subsidies. They're prepared to argue that tax cuts are needed to stimulate the nation's relatively modest economic growth - a projected rate of less than 2 percent this year - as well as offset anticipated increases in interest rates by the Federal Reserve that are likely to dampen growth further.

The payments in question, known as cost-sharing reductions, go to insurance companies to help low-income Americans afford policies and help keep premiums down.

That requirement can save thousands of dollars for families with big medical bills, especially those with low incomes, but it imposes a significant cost on insurance companies.

Since early this year, the administration has refused to commit to continue sending the checks.

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Senate Republicans have repeatedly tried, but failed, to pass legislation that eliminates or overhauls Obama's health care law.

The CBO estimate of the effect of ending the cost-sharing payments on premium hikes almost matches what independent nonpartisan experts previously predicted.

This is the type of plan that consumers must buy in order to qualify for cost-sharing subsidies. The judge ruled that the president has an affirmative duty not to make the payments without an explicit Congressional appropriation, and that doing so violates the Constitution. After a federal judge previous year sided with Republicans, the subsidies have been in limbo while the Trump administration decides how to proceed. The ruling was stayed pending appeal, and has been on hold since Trump won the presidency.

The current administration's stance is that it could drop the case - and stop making the payments - at any point.

Trump previously called for removing the Obamacare subsidies to force Democrats to work with Republicans on a solution to repeal and replace Obamacare.

The report from the nonpartisan budget office said that cutting off the payments would have paradoxical effect of increasing federal spending. To avoid losing money, some insurers would pull out of the marketplaces.

"State insurance commissioners have warned that abrupt cancellation of cost-sharing subsidies would cause premiums, copays and deductibles to increase and more insurance companies to leave the markets in 2018". They would pay a little more for these policies, but the larger premium subsidies would cover much of the higher premium.

Or, more accurately, it's going to cost taxpayers - about $194 billion over 10 years.

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