CBO Report: The Effects of Terminating Payments for Cost-Sharing Reductions

The Congressional Budget Office released its analysis of the impact that eliminating the Cost-Sharing Reduction subsidies, which provide federal support for low and middle-income consumers to purchase health insurance through the exchanges, would have on the marketplace.

In short:

  • Premiums for Silver health plans would rise an estimated 20% in 2018 and 25% by 2020. Insurance plans would need to raise their premiums to offset the lost funding.
  • Federal deficits would increase by $6 billion in 2018, $21 billion in 2020, and $26 billion in 2026, for an overall increase in the federal deficit of $194 billion.

  • Initially, some carriers would exit the market, or choose not to enter. This would leave about 5% of people in areas of the country in which insurers would not participate in the exchange market in 2018, but insurers would participate in nearly all areas by 2020. 

Tim Jost, at Health Affairs, takes a look at the impact terminating the CSRs would have on the federal deficit and examines some potential problem areas in the CBO analysis and methodology., and The Center for Budget Policy and Priorities claims, "Severe Harm If Trump Halts Health Cost-Sharing Payments."

In Maryland, carriers have already submitted rate requests for 2018 which are among the highest in the nation at 50% or more. We expect more news on the rates for 2018 to be announced later next week. Stay tuned!