CBO: Cutting ACA insurer payments would increase federal deficit by $194B by 2026

The Congressional Budget Office and the Joint Committee on Taxation estimated how terminating the ACA's cost-sharing reduction payments — which help insurers subsidize the cost of coverage for low-income Americans — would affect the federal deficit and the individual health insurance market if eliminated next year.

Here are five key takeaways from the report.

1. CBO anticipates insurers would exit some states' individual marketplaces "because of substantial uncertainty about the effects of the policy on average healthcare costs for people purchasing plans."

2. The number uninsured individuals would increase by 1 million compared to the baseline in 2018, but would be about 1 million lower in each year starting in 2020.

3. Excluding premium tax credits, gross premiums for silver products sold through the individual exchanges would grow 20 percent in 2018 and 25 percent higher by 2020 if CSR payments are eliminated. Most enrollees on the individual marketplace must purchase a silver plan to qualify for CSR payments.

4. CBO estimates the federal deficit would increase by $194 billion by 2026. The increase reflects an uptick in premium tax credits distributed per person as a result of higher premium costs associated with the elimination of CSR payments. 

5. Including premium tax credits, most individuals purchasing silver plans on the exchanges would see net premiums similar or less than what they would pay otherwise throughout the next decade.

For the CBO's full report, click here.  

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