08.15.2017 / Press Release

CBO Finds that Trump’s Sabotage of Payments to Lower Deductibles for Families Would Spike Premiums, Destabilize Markets, and Increase Federal Deficits

Washington, D.C. – Following is the statement of Frederick Isasi, executive director of Families USA, on the Congressional Budget Office (CBO) report released today. The report analyzed what would happen if, starting in January 2018, the federal government cancelled so-called “cost-sharing reduction” payments, or CSRs. These payments cover insurers’ cost of lowering deductibles and other out-of-pocket costs for almost 6 million marketplace enrollees.

CBO found that eliminating these payments would cause an immediate 20 percent increase in premiums. Insurance companies would also pull out of marketplaces. By 2018, for example, CBO estimates that at least one in twenty Americans (5 percent) would live in parts of the country where no individual insurance was available. If the decision to cancel these payments was made after insurance companies finalized their premium bids, more insurers would pull out, and in some instances, CBO estimates that residents in entire states could lose access to marketplace coverage. By contrast, CBO found that if CSR payments continue, less than one-half of one percent of the country will live in areas without private insurance options.

CBO also found that federal budget savings from cancelling the payments would be greatly outweighed by increased federal costs resulting from higher premiums. On balance, the federal deficit would increase by $194 billion over 10 years.

“For the President to withhold these payments now would constitute deliberate sabotage – pure and simple. The President won’t just be watching the health care system fail; he’ll be wrecking it himself. Without these payments, premiums will rise by 20 percent in 2018. Some insurers will decide enough is enough and leave individual insurance markets altogether, leaving some families without any insurance options. This will hit many states hard. But hardest hit will be states that haven’t expanded Medicaid, many with Republican governors and legislatures.

“There is no reason for this to happen. President Trump should help bring stability to the market by promising to make these payments, or be ready to accept the full blame for wrecking American health insurance markets. Furthermore, Congress needs to push forward with bipartisan reforms that clarify any legal ambiguity and permanently fund these payments, putting an end to this uncertainty once and for all.”