President Trump threatened repeatedly to cut off the payments, which he's called "bailouts," during the unsuccessful effort by Senate Republicans to repeal and replace the Affordable Care Act, or Obamacare.
More recently, the president has remained mute on the topic, and insurers have been left to wonder whether they will receive a check this month for the discounts they paid out in July.
Bagley says there's no good policy reason to cut off the payments. "If you can cover roughly the same number of people for about $200 billion less, why wouldn't you want to do that?" he asks.
Cutting the cost-sharing payments ends up costing the government more because insurance companies say they will raise rates in response. Under the Affordable Care Act, people with lower incomes who buy insurance on the exchanges get a tax credit, so their costs remain stable as a share of their income. That means that when premiums rise, those government subsidies rise as well.
The CBO says for people with incomes below 200 percent of the federal poverty level, the out-of-pocket cost of insurance would remain about the same because of the bigger tax credits. For those with incomes between 200 and 400 percent of the federal poverty level, the cost to buy insurance could actually get cheaper.
Last year, about 85 percent of people who bought Obamacare insurance got a tax credit, according to the Centers for Medicare and Medicaid Services.
"The CBO analysis makes clear that ending cost-sharing subsidies would be a perfect example of cutting off your nose to spite your face," says Larry Levitt, a vice president at the Kaiser Family Foundation. "Premiums would rise, and the government would end up spending more in the end through tax credits that help people pay their premiums."
The CBO report confirms earlier analyses, including this one by Kaiser and this one from the consulting firm Oliver Wyman, that suggested eliminating the cost-sharing payments could make policies cheaper for some individuals.
Some insurers may decide to leave the ACA markets altogether if the subsidies were to disappear "because of the substantial uncertainty about the effects of the policy on average health care costs," the CBO says. The agency estimates about 5 percent of the population would not have access to insurance through the ACA markets next year if Trump ends the payments.
But the agency says insurers would come back over the next two years.
Timothy Jost, a professor emeritus of health care law at Washington and Lee University School of Law, says that picture may be a bit too rosy.
He says the CBO assumes that state insurance commissioners will allow insurance companies to set premiums in ways that would be most advantageous to them, thereby ensuring they continue to sell policies on the Obamacare exchanges. But that may not happen, Yost warns.
"CBO assumes that things will work out rationally, and there will be a smooth landing," he says. "It could be much more chaotic than that."
Last Friday, the Department of Health and Human Services extended the deadline for insurance companies to decide what health plans to offer on the Obamacare exchanges and what to charge.
The cost-sharing payments have been at the center of a political battle over the Affordable Care Act since before President Trump took office.
House Republicans opposed to the health law sued then-President Barack Obama, saying the payments were illegal because Congress hadn't appropriated money for them. A judge agreed but allowed the administration to continue making the payments during an appeal.
Now that Trump is in the White House, and Republican efforts to repeal and replace the Affordable Care Act have failed, many Republicans are urging the president to continue the payments rather than undermine the health care markets.
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