Government costs could rise $2.3 billion
without Obamacare payments: study
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[April 25, 2017]
WASHINGTON (Reuters) - The U.S.
government's costs could increase by $2.3 billion in 2018 if Congress
and President Donald Trump decide not to fund Obamacare-related payments
to health insurers, according to a study released Tuesday by the Kaiser
The payments amount to about $7 billion in fiscal year 2017 and help
cover out-of-pocket medical costs for low-income Americans who purchase
insurance on the individual insurance exchanges created by the
Affordable Care Act, often called Obamacare.
Trump has threatened to withhold the payments to force Democrats to the
negotiating table on a healthcare bill to replace Obamacare.
He has also said he will fund the subsidies if Democrats agree to
funding for his proposed border wall with Mexico as part of efforts to
pass a government funding bill this week and avert a shutdown. Democrats
have rejected the conditional offer.
If no deal is made, parts of the federal government will shut down at
12:01 am on Saturday.
The payments are the subject of a pending Republican lawsuit that was
appealed by the Obama administration and put on hold when Trump took
The government could save $10 billion by revoking the payments, Kaiser
said. But insurers that remain in the market would have to hike premiums
nearly 20 percent to cover their losses, Kaiser found, so the government
would have to spend $12.3 billion on tax credits to help pay for
Americans' premium costs - a net increase of 23 percent on federal
spending on marketplace subsidies.
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The federal government forms for applying for health coverage are
seen at a rally held by supporters of the Affordable Care Act,
widely referred to as "Obamacare", outside the Jackson-Hinds
Comprehensive Health Center in Jackson, Mississippi, U.S. on October
4, 2013. REUTERS/Jonathan Bachman/File Photo
The projection assumes that insurers remain in the marketplace next
year. Health policy experts have said without the payments, many
insurers could not afford to stay in the market and will likely
exit, which would leave some U.S. counties without an insurer.
Aetna <AET.N>, UnitedHealth Group Inc <UNH.N> and Humana <HUM.N>
have already exited most state exchanges for 2017 and said they will
do so next year as well.
(Reporting By Yasmeen Abutaleb; Edited by Caroline Humer and Mary
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