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CBO: Pulling Obamacare subsidies would drive up premiums, increase deficit

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CBO warns about pulling Obamacare subsidiesScrapping Obamacare’s cost-sharing subsidies would increase premiums on the most popular plans by 20 percent next year and swell the deficit by $194 billion over a decade, according to an analysis by the Congressional Budget Office.

President Donald Trump has threatened to eliminate the subsidies, estimated to be $7 billion this year, before the next payments are due next week. Insurers rely on the subsidies to reduce out-of-pocket costs for low-income Obamacare customers.

Insurers have already cited uncertainty surrounding the funding as a reason for big premium increases for 2018. Health plans might decide to bolt the Obamacare markets altogether if the payments go away. They have until late September in most states to make final decisions about 2018 participation.

The CBO projects that 5 percent of Americans would live in areas without any insurer willing to sell Obamacare coverage for next year if the subsidy payments are scrapped. However, the agency expect most markets to again be covered by 2020, once insurers adjust to the new landscape.



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