CBO: If Trump Cuts CSR Payments, Premiums Jump By 20%, Deficit Increases (UPDATED)

CBO: If Trump Cuts CSR Payments, Premiums Jump By 20%, Deficit Increases (UPDATED)

Donald Trump's ego is costing us all a lot of money, and his attacks on Obamacare are only one example. The NY Times reports on the new CBO findings of what will happen if Trump cuts the payments that keep insurance premiums stable:

WASHINGTON — Premiums for the most popular health insurance plans would shoot up 20 percent next year, and federal budget deficits would increase by $194 billion in the coming decade if President Trump carries out his threat to end certain subsidies paid to insurance companies for the benefit of low-income people, the Congressional Budget Office said Tuesday.

The subsidies reimburse insurers for reducing deductibles, co-payments and other out-of-pocket costs that low-income people pay when they visit doctors, fill prescriptions or receive care in hospitals.

Even before efforts to repeal the Affordable Care Act collapsed in the Senate last month, Mr. Trump began threatening to cut off the subsidies, called cost-sharing reductions. He said the health care law would “implode” and Democrats would have no choice but to negotiate a replacement plan. Mr. Trump described his strategy as, “Let Obamacare implode, then deal.”

The nonpartisan budget office has now quantified the cost of the threats.

If Mr. Trump stops paying the subsidies, the budget office said, insurers will increase premiums for midlevel “silver” plans, and the government will incur additional costs because, under a separate program, it provides financial assistance to low-income people to help them pay those premiums.

UPDATE (Karoli): Wednesday the administration agreed to pay the August CSRs, but this cycle of dragging their feet and dragging them until the very last minute doesn't seem like it will change anytime soon.

Trump may have agreed to pay the subsidies Wednesday, but the wavering decision-making process signals a troublesome tactic to potential partners looking to strike deals with the federal government. “How can any company in any sector trust the United States after seeing health insurers treated so shabbily?” asked health experts Craig Garthwaite and Nicholas Bagley, when Republicans in Congress were undermining the ACA. The question still rings true.


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“I think the government — Congress and administration, has treated [insurance companies] shamefully,” Timothy Jost, emeritus professor at Washington and Lee University School of Law, told ThinkProgress. “If they treated Defense, or Medicare providers, or Medicare Advantage Plans providers the way they have treated insurers under the ACA, they would shut down.”

Trump has called CSR payments insurance “bailouts,” but his hyperbolic language distorts the facts. These payments were essentially an agreement reached under the ACA. If insurance companies don’t subsidize care, they would be breaking current health law. CSR subsidies help lower-to-moderate income people purchase more affordable coverage; 57 percent of those enrolled in the ACA exchanges benefit from this type of subsidy– that’s 5.9 million people.

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