Report: Higher premiums if Trump halts Obamacare subsidies

WASHINGTON — Premiums for a popular type of individual health plan would rise sharply, and more people would be left with no insurance options if President Donald Trump makes good on his threat to stop Obamacare payments to insurers, the Congressional Budget Office said Tuesday.

The nonpartisan number crunchers also estimated that cutting off payments that now reduce copays and deductibles for people of modest incomes would add $194 billion to federal deficits over a decade. That head-scratching outcome is because a different Affordable Care Act subsidy would automatically increase as premiums jump, more than wiping out any savings.

At issue are the ACA’s “cost-sharing” payments, totaling about $7 billion this year, which reimburse insurers for subsidizing out-of-pocket costs for people with modest incomes.

It’s a financial break that 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 payments. Trump has been threatening to end the monthly payments.

The report lays out consequences if that happens:

• Consumers who now qualify for tax credits to offset their monthly premiums would be largely shielded from the estimated 20 percent jump in the cost of a standard “silver” plan, because of the automatic increase in the ACA’s premium subsidies.

• Depending on factors like their income and age, some subsidized customers would be able to take their higher premium tax credits and buy a generous “gold” level plan for about the same money, or a skimpy “bronze” plan for much less or nothing.

• Some insurers would decide to exit the market rather than re-jigger premiums for 2018 at the last minute. That would leave areas of the country that are home to about 16 million people with no insurers on the health care marketplace for individual policies. Rural communities are at greater risk.