Average premiums for health insurance packages purchased individually will jump around 15 percent next year, due to marketplace concerns over whether President Donald Trump blocks federal subsidies to insurers, said Newsmax citing a nonpartisan Congress analyst.
Following President Trump’s threats to halt the payment in his drive to dismember former president Obama’s healthcare law, the Congressional Budget Office has come up with new estimates.
The agency noted that the 2018 premiums will spike “largely because of short-term market uncertainty — in particular, insurers’ uncertainty about whether federal funding for certain subsidies that are currently available will continue to be provided.” It also attributed the projected increase to growing numbers of people living in regions where only one insurer sells policies, therefore facing less competition.
Obama’s law requires insurers to reduce out-of-pocket costs like deductibles for lower-earning customers and mandates that the government reimburses the companies. It costs the government about $7 billion annually.
A federal court has ruled Congress didn’t authorize the expenditures, but the subsidies have until now continued. White House spokesman Ninio Fetalvo accused the budget office of issuing analysis that “have been off base for years.”
Fetalvo said while the administration considers whether to continue the payments, “real reform which lowers costs and expands choices will only come from repealing and replacing Obamacare.”
The budget agency has a sterling reputation with most objective, outside fiscal experts. The GOP effort to erase Obama’s law failed in the Senate in July, and a renewed effort by some Republican senators to scuttle the law is considered unlikely to succeed.
Continuing the federal subsidies “remains essential to the stability of the individual market,” said Kristine Grow, a spokeswoman for America’s Health Insurance Plans, that industry’s largest trade group. The budget office and insurance industry had previously projected that 2018 premiums would grow an average 20 percent if Trump actually halts the subsidies.
Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., have been trying to craft an agreement continuing the payments for at least a year. In exchange, Alexander wants Democrats to make it easier for states to relax the Obama law’s coverage requirements, which Democrats are resisting.
The report said it expects the 10 million Americans buying coverage on government-operated insurance exchanges this year to grow to 11 million in 2018.
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