Aug 15, 2017

CBO warns of market chaos if ACA insurer payments end

Caitlin Owens

(Alex Brandon / AP)

The Congressional Budget Office says the individual health insurance market will become less stable in the short term if the administration stops paying the Affordable Care Act insurer subsidies, which are passed along by law to low-income enrollees to help with out-of-pocket costs.

What it said:

  • Premiums will rise by 20 percent in 2018 and by 25 percent in 2020.
  • Cost: $194 billion from 2017-2026. (Because tax credits would increase, shielding many people from the rate hikes).
  • Change in the number of uninsured: Slightly higher in 2018, but slightly lower starting in 2020.
  • 5 percent of the country will have no insurers in 2018, but almost all people would have access to insurance by 2020 as markets adjusted.

Context: President Trump has threatened repeatedly to stop making the payments, but for now the issue remains unresolved. Lawmakers from both parties have actively discussed funding the subsidies in some kind of stabilization package over the last few weeks and will attempt to do so next month.

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