Health Exchange Premiums Would Rise 20% in 2018 If Subsidies Ended, CBO Estimates--Update

By Stephanie Armour Features Dow Jones Newswires

Premiums for middle-priced plans on the Affordable Care Act's individual market would climb by 20% in 2018 if the federal government halted the billions of dollars in payments it sends to insurers under the health law, the Congressional Budget Office estimated in a report released Tuesday.

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Insurers and supporters of the law say the federal payments are essential to sustaining the already fragile individual ACA insurance markets, but President Donald Trump has warned that he could halt the subsidies. Insurers have said that if that occurred, they would raise premiums or leave the individual markets.

Mr. Trump and some Republican lawmakers oppose the funding, saying the money was never appropriated by Congress and it amounts to a bailout for insurers.

Premiums for mid-priced plans sold on the ACA's exchanges would rise if the payments were suspended, which would require the government to pay larger tax credits to consumers that help offset the cost of coverage, according to the report by the nonpartisan CBO and Joint Committee on Taxation. As a result, the federal deficit would increase by $194 billion through 2026, the report said.

The assessment could stoke bipartisan efforts in the Senate to pass legislation preserving the payments in 2018. Lawmakers have a tight window to move a bill through both chambers of Congress, because insurers face a late September deadline for committing to the ACA markets for next year.

The CBO and taxation committee report said about 5% of people would live in areas with no insurers in the individual market in 2018 if the subsidies ended, because insurers would withdraw or not enter those markets.

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"If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!" Mr. Trump tweeted on July 29, after Senate GOP lawmakers failed to pass a bill to repeal most of the ACA.

(More to come.)

Write to Stephanie Armour at stephanie.armour@wsj.com

(END) Dow Jones Newswires

August 15, 2017 15:04 ET (19:04 GMT)