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Fears of Market Turmoil with ACA Support Cut

President Trump’s decision to immediately end payments to the $8 billion Affordable Care Act cost-sharing reduction program, terminating subsidies that carriers consider critical to market stability, is prompting widespread concern of possible market chaos...
October 17, 2017

President Trump’s decision to immediately end payments to the $8 billion Affordable Care Act cost-sharing reduction program, terminating subsidies that carriers consider critical to market stability, is prompting widespread concern of possible market chaos.

“As far as the subsidies are concerned, I don’t want to make the insurance companies rich,” Trump told reporters at the White House. “They’re making a fortune by getting that kind of money.” The president also said he would dismantle Obamacare “step by step.” About 10 million people are enrolled in Obamacare through its online marketplaces, and most receive subsidies.

Eighteen U.S. states sued President Trump’s administration to stop him from scrapping the subsidies. The states include: California, Connecticut, Delaware, Kentucky, Illinois, Iowa, Maryland, Massachusetts, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington state, along with the District of Columbia.

The states will ask the court to force Trump to make the next payment. Legal experts said the states were likely to face an uphill battle in court.

READ: Is Trump Replacing Obamacare or Trying to Gut It?

National Association of Insurance Commissioners (NAIC) CEO Michael Consedine said ending the subsidy payments will cost insurers at least $1 billion this year alone and will boost premiums 12 percent to 15 percent on average next year. “State regulators across the country are very disappointed,” he said. Consedine cited a Congressional Budget Office estimate that the decision will increase taxpayer costs by $6 billion in 2018.

Several major insurers said they intend to provide health plans on the Affordable Care Act's (ACA) exchanges for the rest of this year and for 2018, even as President Donald Trump issued an executive order ending federal cost-sharing payments, according to the Wall Street Journal.

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