WASHINGTON — Premiums for the most popular health insurance plans would shoot up 20 percent next year, and federal budget deficits would increase by $194 billion in the coming decade if President Trump carries out his threat to end certain subsidies paid to insurance companies for the benefit of low-income people, the Congressional Budget Office saidTuesday.
The subsidies reimburse insurers for reducing deductibles, co-payments and other out-of-pocket costs that low-income people pay when they visit doctors, fill prescriptions or receive care in hospitals.
Even before efforts to repeal the Affordable Care Act collapsed in the Senate last month, Mr. Trump began threatening to cut off the subsidies, called cost-sharing reductions. He said the health care law would “implode” and Democrats would have no choice but to negotiate a replacement plan. Mr. Trump described his strategy as, “Let Obamacare implode, then deal.”
Those threats continue, though each month, the Trump administration has issued the subsidies.
The nonpartisan budget office has now quantified the cost of the threats.
If Mr. Trump stops paying the subsidies, the budget office said, insurers will increase premiums for midlevel “silver” plans, and the government will incur additional costs because, under a separate program, it provides financial assistance to low-income people to help them pay those premiums.
The dispute over the subsidy payments dates back to 2014, when House Republicans filed a lawsuit asserting that the Obama administration was paying the subsidies illegally because Congress had never appropriated money for them. Last year, a federal judge agreed. The judge ordered a halt to the payments, but suspended the order to allow the government to appeal. The case is pending before the United States Court of Appeals for the District of Columbia Circuit.
The Trump administration has been providing funds for cost-sharing subsidies month-to-month, with no commitment to pay for the remainder of this year, much less for 2018.
Doctors, hospitals, insurers, consumer groups and the United States Chamber of Commerce have all urged Mr. Trump to continue paying the cost-sharing subsidies. Senator Lamar Alexander, Republican of Tennessee and the chairman of the Senate health committee, has said he plans to hold hearings next month, with a view to producing bipartisan legislation that would stabilize insurance markets and provide money for the subsidies.
“Without payment of these cost-sharing reductions, Americans will be hurt,” Mr. Alexander said recently.