Published: Thu, August 17, 2017
Entertaiment | By Simon Arnold

Threat to Health Care Subsidies Will Spike Premiums, CBO Warns

Threat to Health Care Subsidies Will Spike Premiums, CBO Warns

The House Democratic Leader and the Democratic Whip requested the estimate. Under CBO's projections, she would now have the option of enrolling in a gold plan for a net premium of $6,800, far less than the $11,100 charged under current law, and almost the same as she would pay under current law for a silver plan of substantially lesser actuarial value.

As worrisome as those projections appear, the CBO's assumption may underestimate the full impact of eliminating the subsidies, says Timothy Jost, a health care policy expert and emeritus professor at the Washington and Lee University School of Law. However, the premiums that they and the government pay together are the same as others in the silver tier, so those premiums do not pay for the more generous benefits. But Congress is running out of time to act before 2018 rates are set. If Trump kills the subsidies, it's possible that same insurance shoppers could actually end up with cheaper, or even free, coverage. Given that 75 percent of Obamacare enrollees received free insurance through Medicaid, the CBO estimates that the USA deficit will jump by another $194 billion between 2017 and 2026 as a result.

"The CBO's report once again exposes the vast cynicism of President Trump's threats to purposefully raise Americans' health costs by cutting off cost sharing reduction payments", Pelosi said in a statement Tuesday.

No one knows how the Trump administration will manage ObamaCare, which makes it exceedingly hard for insurers to price their plans. PoliticallyGeorgia will bring you reporting you can't get anywhere else, thought-provoking opinion writing, and tools to help you navigate the world of government and make your voice heard. "If they treated Defense, or Medicare providers, or Medicare Advantage Plans providers the way they have treated insurers under the ACA, they would shut down".

The cost-sharing reduction payments to insurers are not guaranteed by the ACA.

In this system the government provides payments to insurance companies and they pass on the "savings" to customers.

Anthem Inc, one of the largest remaining Obamacare insurers, earlier this month scaled back its offerings in Nevada and Georgia and blamed the moves in part on uncertainty over the payments. One of the key assumptions that the CBO made in its analysis is that the decision to stop paying the subsidies in 2018 would be made by the end of August.

The report stated that more people would be able to purchase plans without the subsidy by then, however this may not be applicable to same low-income population that would lose insurance in 2018.

U.S. Sens. Lamar Alexander (R-Tenn.), chairman of the Senate Health Committee, and Patty Murray (D-Wash.), the panel's ranking member, said they would hold hearings when Congress returned next month on the current law.

"To me, it's yet another bit of chaos in the market that indicates we need to do two things", Kelly McCutchen, the president and CEO of the libertarian-leaning Georgia Public Policy Foundation, said of the report. 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.

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