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. It found that halting payments would increase the federal deficit by $194 billion through 2026.
Many people would be cushioned from the impact of the increases because federal tax credits rise automatically when premiums do.
If the payments ended, 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, according to CBO. 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.
Cost-sharing reduction payments 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.
The issue has also been caught up in court, and if Trump decides to stop appealing a court 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.
Additionally, 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.
If insurers don’t know if CSRs will be funded, they could exit the marketplaces, health experts warn. That could possibly lead to some areas have no insurers selling plans on their exchanges.