At the request of Nancy Pelosi, the Congressional Budget Office has just released a study intended to better understand the potential economic impacts that would result from the cancellation of taxpayer funded Obamacare subsidies (a.k.a. "cost-sharing reductions" or "CSRs"). The report is entitled "The Effects of Terminating Payments for Cost-Sharing Reductions," and, among other things finds that cutting CSRs would cause a 20% spike in Obamacare premiums in 2018 and result in a $194 billion increase in the deficit from 2017 through 2026.
Here are the highlights:
- The fraction of people living in areas with no insurers offering nongroup plans would be greater during the next two years and about the same starting in 2020;
- Gross premiums for silver plans offered through the marketplaces would be 20 percent higher in 2018 and 25 percent higher by 2020—boosting the amount of premium tax credits according to the statutory formula;
- Most people would pay net premiums (after accounting for premium tax credits) for nongroup insurance throughout the next decade that were similar to or less than what they would pay otherwise—although the share of people facing slight increases would be higher during the next two years;
- Federal deficits would increase by $6 billion in 2018, $21 billion in 2020, and $26 billion in 2026; and ? The number of people uninsured would be slightly higher in 2018 but slightly lower starting in 2020.
Or, put more simply...if Trump decides to cut taxpayer-funded subsidies for a completely failed Obama-era piece of legislation then all future premium hikes are his fault...
While Obama has yet to offer an official statement on the CBO's report, we imagine it would go something like this:
Of course, according to data from the Department of Health and Human Services, the average individual purchaser of health insurance across the United States saw their premiums increase from $232 per month in 2013 to $476 per month in 2017, a 'modest' increase of over 100% in just a few years.
Ironically, that equates to a constantly annualized growth rate of exactly 20% per year.
Said another way, the CBO predicts that, without the benefit of taxpayer subsidies, Obamacare premiums would increase in 2018 at the exact same rate they've increased for each of the past 4 years...except they managed to find a convenient excuse for the continued collapse of a failed policy and a scapegoat...President Trump.
Well played, Nancy...well played.
The full report from the CBO can be read here: