Halting Obamacare Subsidies Would Increase Deficit, CBO Says

Kristen Gonzales
August 18, 2017

Now the law requires insurers to hold down deductibles and co-payments for people who receive coverage through the Obamacare marketplaces and whose incomes fall below a threshold of roughly two-and-a-half times the federal poverty level.

The CSRs, worth about $7 billion this year, compensate insurers for offering qualified low- and moderate-income Obamacare customers discounts in their their out-of-pocket health costs, including co-payments and deductibles. That's because almost 80% of people receiving coverage on the marketplaces also receive a second kind of government assistance to help pay monthly premiums. But the money is under a legal cloud because of a dispute over whether the Obama-era law properly authorized the payments. The judge ordered a halt to the payments, but suspended the order to allow the government to appeal.

The premiums for the medium-cost silver plans on the exchanges would go up by about 20% to 25% over the next couple of years, the budget office said. Solid middle-class households who make too much to receive help for premiums could avoid a big hit by looking for coverage outside the government marketplace.

A small and temporary reduction in the number of people covered. As it is, some markets in the nation already have no insurers. In addition, it is possible that if the federal government cut off CSR payments, some states would set up programs to funnel money to insurers using the health care law's state waiver program. Rural communities are at greater risk.

President Trump has threatened to end the payments, which would throw insurers and the exchanges into chaos for the year.

"Regardless of what this flawed report says, Obamacare will continue to fail with or without a federal bailout".

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The payments have been put into question since the House Ways and Means and the Energy and Commerce committees investigated the source of funding for the subsidies and said they were unconstitutional. They have until late September in most states to make final decisions about 2018 participation. Over her 20-year-plus-career, she's spent more time outside the Beltway, both as a business reporter for The Hartford Courant and nine years in OH, mostly at the Dayton Daily News.

CBO officials based their estimates on a model in which the administration continues the payments through this year but tells insurers by the end of this month that the subsidies would be discontinued in 2018.

President Trump has suggested he would suspend the payments to speed Obamacare's demise, while other times he's signaled he would hold the payments hostage to try to force Democrats to the table to renegotiate President Obama's signature health law.

After the GOP drive to repeal "Obamacare" collapsed, the president tweeted: "As I said from the beginning, let ObamaCare implode, then deal". This way, the administration and Congress has no other option other than comply. "They were never appropriated by Congress".

The subsidies are now the subject of litigation. After a federal judge past year sided with Republicans, the subsidies have been in limbo while the Trump administration decides how to proceed.

Other reports by TheSundaySentinel

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