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Premiums for certain Affordable Care Act plans are expected to spike by 34% this year, prompting a $10 billion increase in federal subsidies, the Congressional Budget Office said today.

Between the lines: CBO's estimates strongly suggest that this year’s increases are a response to the repeal of the ACA’s individual mandate, on top of new regulations from the Trump administration.

By the numbers:

  • CBO is anticipating a 21% jump in the cost of federal subsidies this year, driven by a 34% jump in premiums for the “benchmark” plans to which those subsidies are pegged.
  • But after that, CBO expects a big slowdown. Federal spending on the ACA’s premium subsidies will likely grow by about 5% per year for the rest of the next decade, the budget office said. Those annual increases are mainly a result of rising health care costs.

How it works: Premiums go up every year, and premiums inside the ACA’s marketplaces had seen some very big spikes before Trump was elected. This isn’t entirely on Trump.

  • But there’s no question the repeal of the mandate, and his decision to end a separate stream of payments to insurance companies, drove premiums even higher this year, and will have a similar effect next year.

Why it matters: The ACA’s insurance markets are increasingly turning into an option that only really works for the lower-income people who receive premium subsidies. Those payments largely insulate them from skyrocketing premiums, while unsubsidized consumers are finding ACA coverage further out of reach.

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Dan Primack, author of Pro Rata
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Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 12 p.m. ET: 33,156,812 — Total deaths: 998,696 — Total recoveries: 22,961,436Map.
  2. U.S.: Total confirmed cases as of 12 p.m. ET: 7,118,523 — Total deaths: 204,790 — Total recoveries: 2,766,280 — Total tests: 101,298,794Map.
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  5. World: India the second country after U.S. to hit 6 million cases