CBO: ObamaCare premiums could rise 20 percent if Trump ends payments

By Rachel Roubein, August 15, 2017

Insurance companies would raise premium prices about 20 percent for ObamaCare plans if President Trump ends key payments to insurers, according to the Congressional Budget Office (CBO).

At the request of House Democratic leadership, CBO estimated what would happen if the payments to insurers ended after December. Under this scenario, CBO staff said, insurers would know by the end of August that the payments would be ending.

Premiums for silver plans would be 25 percent higher by 2020, according to CBO. The analysis also found that halting payments would increase the federal deficit by $194 billion through 2026.

Cost-sharing reduction payments (CSRs) are made to insurers, compensating them for discounting out-of-pocket costs for certain enrollees.

Insurers have been pleading for certainty from the administration on whether they’ll continue to receive the payments, which total about $7 billion for fiscal 2017.

The administration has been making these payments on a monthly basis, but Trump has threatened to halt the funds, calling the money “bailouts” for insurance companies.

Democrats said Trump will own any premium increases if he ends the payments.

“Try to wriggle out of his responsibilities as he might, the CBO report makes clear that if President Trump refuses to make these payments, he will be responsible for American families paying more for less care. He’s the President and the ball is his court – American families await his action,” Senate Minority Leader Chuck Schumer (D-N.Y.) said in a statement.

The White House pushed back on the CBO's analysis, calling it flawed.

“Regardless of what this flawed report says, Obamacare will continue to fail with or without a federal bailout. Premiums are accelerating, enrollment is declining, and millions are seeing their options dwindling,” Ninio Fetalvo, a White House spokesman, wrote in an emailed statement. 

No decisions have been made on if CSR payments will continue, Fetalvo wrote, adding that ObamaCare “must be repealed and replaced.”

If the payments ended, according to CBO, some carriers would withdraw from ObamaCare and about 5 percent of people would live in an area without any options on the exchanges in 2018. But by 2020, CBO estimates more insurers would participate again, so that most areas would be covered.

The number of people without insurance would be slightly higher next year but a little lower in 2020, according to the analysis.

While ending the payments would boost premiums, many people would be cushioned from the impact because federal tax credits rise automatically when premiums do.

The issue of the payments has also been caught up in court; if Trump decides to stop appealing a ruling against the administration, CSR payments could stop. The deadline for another update is coming up quick — Aug. 20. The case has been on hold for months and could be delayed again.  

Meanwhile, the Senate Health Committee will hold hearings on a bipartisan, short-term stabilization measure the first week of September. The goal, according to Chairman Lamar Alexander (R-Tenn.), is to craft a bill by mid-September that includes funding the payments to insurers.

But insurers are bumping up against major deadlines.

Last week, the administration extended the deadline for carriers to finalize how much their premiums will cost on HealthCare.gov. That date is now Sept. 5, and insurers sign contracts locking them into selling plans Sept. 27.

Related article: CBO: Severe Harm If Trump Halts Health Cost-Sharing Payments

http://thehill.com/policy/healthcare/346646-cbo-obamacare-premiums-could-rise-20-percent-if-trump-ends-payments

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