CBO: Ending Obamacare subsidies would raise premiums and the deficit

CBO: Ending Obamacare subsidies would raise premiums and the deficit

In fact, the CBO predicted the change would slightly increase the number of people with insurance, since some customers buying cheaper bronze plans would benefit from the higher subsidies. There are 7.7 million individuals with silver policies nationally out of a total of 11 million policyholders. They are only available to people who buy silver-level plans on the Obamacare exchanges.

President Donald Trump's administration will continue to make critical payments to insurers participating in Obamacare's individual health insurance marketplaces in August. The Obama administration, which had requested an appropriation, chose to pay them anyway.

The capitalist economics at play in this avoidable crisis are blunt and harsh. So it provided for a system of subsidies for people whose incomes qualified them and who purchased a silver plan in their state exchange.

Not one of these industry sectors said during 2017's health care debate that they would be willing to moderate their anticipated profits. If Obamacare-entering its fifth open enrollment period this fall-is so fragile that losing a few million dollars of advertising will tank insurance markets, what does that say about the stability, let alone the wisdom, of the law in the first place?

With numerous top health insurance industry players jumping ship on Obamacare, Southern California Public Radio reported that the board of Covered California will consider a plan on August 17 that would incentivize health insurers to offer coverage by guaranteeing that for any lack of profit or losses they suffer in 2018, California will guarantee them the right to jack up profits with higher premium increases in each of the following three years.

But the CBO found that any premium increases will have an nearly paradoxical effect: for the most part, individuals will not pay more for health insurance, but the government will. Those subsidies, a form of tax credit, rise with the price of premiums, and, as a result, the federal deficit would increase by about $194 billion over a decade. That would be a tremendous increase from today's status quo.

"Such estimates are inherently imprecise because the ways in which federal agencies, states, insurers, employers, individuals, doctors, hospitals and other affected parties would respond to the changes made by this policy are all hard to predict", the CBO report states.

Large numbers of people in numerous states that voted for Trump and congressional Republicans would be especially hard hit by ending the subsidies. Their subsidies shrink as household income rises.

A report by the Kaiser Family Foundation found that for people who earn between 150 percent and 200 percent of poverty "the average deductible is reduced to $809, a savings of $2,800" each year.

Mara Lee covers developments in health care policy in Congress and around Washington. Moreover, those who somehow retained coverage would face markedly higher premiums. If insurance companies don't subsidize care, they would be breaking current health law.

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