Threat to ACA remains alive and costly

The Congressional Budget Office, whose estimates of the disastrous impact of various Republican health care bills did so much to sink them, reported this month on the potential impact of President Donald Trump’s Plan B for getting rid of the Affordable Care Act. The prognosis isn’t good, mainly because the goal has become simply to sabotage Obamacare without coming up with something better to replace it.

Several crises ago, Trump threatened to eliminate $8 billion in cost-sharing reduction payments made to insurance companies. The so-called CSR payments reimburse companies for reducing out-of-pocket costs for about 6 million low-income Americans who’ve bought midlevel plans on the state and federal insurance exchanges.

Trump has called the CSR payments a “bailout” of insurance companies. In fact, the money pays for low-income enrollees’ copayments and deductibles. The mere threat that they might go away has made insurers wary of selling Obamacare policies next year without steep price increases.

Democrats asked the Congressional Budget Office to quantify how much premiums might go up. The answer: 20 percent more. This on top of other anticipated increases because of uncertainty surrounding the Affordable Care Act.

Eliminating the CSR payments would actually cost the government $194 billion more over 10 years, the budget office said. That’s because people who had been getting help with their deductibles and co-pays would then become eligible for additional tax credits to help pay insurance costs. In the short run, killing the subsidies would further destabilize an already-shaky insurance market, the budget office said.

The Trump administration has continued to pay the CSR subsidies on a month-tomonth basis even though a federal court last year sided with House Republicans who claimed the subsidies are illegal because Congress never appropriated money for them. That decision is on appeal.

If either Trump or the appeals court decides to stop the payments, the insurance market will get shakier, but government tax credits will make up the difference for consumers. A far better solution would be to stabilize the insurance markets. Better still would be to fix Obamacare rather than replace it.