By — Ricardo Alonso-Zaldivar, Associated Press Ricardo Alonso-Zaldivar, Associated Press Leave your feedback Share Copy URL https://www.pbs.org/newshour/politics/individual-health-policies-will-higher-premiums-trump-halts-obamacare-subsidies-report-says Email Facebook Twitter LinkedIn Pinterest Tumblr Share on Facebook Share on Twitter Individual health policies will have higher premiums if Trump halts ‘Obamacare’ subsidies, report says Politics Aug 15, 2017 4:09 PM EDT WASHINGTON — People buying individual health care policies would face sharply higher premiums, and some may be left with no insurance options if President Donald Trump makes good on his threat to stop “Obamacare” payments to insurers, congressional experts said Tuesday. The nonpartisan Congressional Budget Office also estimated that cutting off the payments would add $194 billion to federal deficits over a decade. That’s because other Affordable Care Act subsidies would automatically increase as premiums rise, more than wiping out any savings. Sticker-price premiums for standard plans would rise about 20 percent before factoring in federal tax credits for consumers, CBO said. About 1 million people would become uninsured right away, but within a few years that slippage would reverse and more people would be covered, the budget office added. READ MORE: Trump administration’s actions raise health insurance premiums, study says At issue are so-called “cost-sharing” payments, totaling about $7 billion this year, that reimburse insurers for subsidizing out-of-pocket costs for people with modest incomes. Trump has threatened to cut off the monthly payments, most recently after the collapse of the GOP health care bill. The subsidies can cut a deductible of $3,500 down to a few hundred dollars. Nearly 3 in 5 HealthCare.gov customers qualify for cost-sharing help, an estimated 6 million people or more. But the money is under a legal cloud because of a dispute over whether the Obama-era law properly authorized the monthly payments. For months, Trump has been raising the prospect of terminating payments as a way to trigger a crisis and get Democrats to negotiate on a health care bill. After the GOP drive to repeal “Obamacare” collapsed, the president tweeted: “As I said from the beginning, let ObamaCare implode, then deal. Watch!” Trump elaborated in another tweet, “If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies…will end very soon!” Insurer groups say there’s been no signal that the administration will stop making payments expected this month. Leading Republican lawmakers have called for continuing the payments, at least temporarily, to ensure market stability. Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander, R-Tenn., is working on such legislation. He and Democratic counterpart Sen. Patty Murray of Washington plan bipartisan hearings. The subsidies are snared in a legal dispute whether the Obama health care law properly approved the payments to insurers. Adding to the confusion, other parts of the law clearly direct the government to reimburse the carriers. READ MORE: President Trump on tricky legal ground with ‘Obamacare’ threat The disagreement is over whether the law properly provided a congressional “appropriation,” similar to an instruction for the Treasury to pay the money. The Constitution says the government shall not spend money unless Congress appropriates it. House Republicans trying to thwart the ACA sued the Obama administration in federal court in Washington, arguing that the law lacked specific language appropriating the cost-sharing subsidies. A district court judge agreed with House Republicans, and the case has been on hold before the U.S. appeals court in Washington. While the legal issue seems arcane, the impact on consumers would be real. CBO estimated that premiums for standard “silver” plans would increase by about 20 percent without the subsidies. Insurers can recover the cost-sharing money by raising premiums, since those are also subsidized by the ACA, and there’s no legal question about their appropriation. Consumers who receive tax credits under the ACA to pay their premiums would be shielded from those premium increases. But millions of others buy individual health care policies without any financial assistance from the government and could face prohibitive increases. By — Ricardo Alonso-Zaldivar, Associated Press Ricardo Alonso-Zaldivar, Associated Press
WASHINGTON — People buying individual health care policies would face sharply higher premiums, and some may be left with no insurance options if President Donald Trump makes good on his threat to stop “Obamacare” payments to insurers, congressional experts said Tuesday. The nonpartisan Congressional Budget Office also estimated that cutting off the payments would add $194 billion to federal deficits over a decade. That’s because other Affordable Care Act subsidies would automatically increase as premiums rise, more than wiping out any savings. Sticker-price premiums for standard plans would rise about 20 percent before factoring in federal tax credits for consumers, CBO said. About 1 million people would become uninsured right away, but within a few years that slippage would reverse and more people would be covered, the budget office added. READ MORE: Trump administration’s actions raise health insurance premiums, study says At issue are so-called “cost-sharing” payments, totaling about $7 billion this year, that reimburse insurers for subsidizing out-of-pocket costs for people with modest incomes. Trump has threatened to cut off the monthly payments, most recently after the collapse of the GOP health care bill. The subsidies can cut a deductible of $3,500 down to a few hundred dollars. Nearly 3 in 5 HealthCare.gov customers qualify for cost-sharing help, an estimated 6 million people or more. But the money is under a legal cloud because of a dispute over whether the Obama-era law properly authorized the monthly payments. For months, Trump has been raising the prospect of terminating payments as a way to trigger a crisis and get Democrats to negotiate on a health care bill. After the GOP drive to repeal “Obamacare” collapsed, the president tweeted: “As I said from the beginning, let ObamaCare implode, then deal. Watch!” Trump elaborated in another tweet, “If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies…will end very soon!” Insurer groups say there’s been no signal that the administration will stop making payments expected this month. Leading Republican lawmakers have called for continuing the payments, at least temporarily, to ensure market stability. Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander, R-Tenn., is working on such legislation. He and Democratic counterpart Sen. Patty Murray of Washington plan bipartisan hearings. The subsidies are snared in a legal dispute whether the Obama health care law properly approved the payments to insurers. Adding to the confusion, other parts of the law clearly direct the government to reimburse the carriers. READ MORE: President Trump on tricky legal ground with ‘Obamacare’ threat The disagreement is over whether the law properly provided a congressional “appropriation,” similar to an instruction for the Treasury to pay the money. The Constitution says the government shall not spend money unless Congress appropriates it. House Republicans trying to thwart the ACA sued the Obama administration in federal court in Washington, arguing that the law lacked specific language appropriating the cost-sharing subsidies. A district court judge agreed with House Republicans, and the case has been on hold before the U.S. appeals court in Washington. While the legal issue seems arcane, the impact on consumers would be real. CBO estimated that premiums for standard “silver” plans would increase by about 20 percent without the subsidies. Insurers can recover the cost-sharing money by raising premiums, since those are also subsidized by the ACA, and there’s no legal question about their appropriation. Consumers who receive tax credits under the ACA to pay their premiums would be shielded from those premium increases. But millions of others buy individual health care policies without any financial assistance from the government and could face prohibitive increases.