Updated Oct. 18 at 10 a.m.
Last week President Trump triumphantly tweeted, “Money pouring into Insurance Companies profits, under the guise of ObamaCare, is over.” He was celebrating the fact that his administration had just ended cost-sharing reductions, payments that the government had been making to insurers to make insurance cheaper for their low-income customers.
Health-policy experts noted that this move, agree with it or not, caused “instability” in the individual-insurance market. But what exactly does that instability mean for people who rely on Obamacare for insurance, who are due to sign up for their plans in a matter of weeks?
First, it’s important to note there are two different types of subsidies in Obamacare. The first are the cost-sharing reductions—these are the ones Trump ended on Thursday. The second are tax credits that all people on the individual market who earn less than 400 percent of the federal poverty level—about $48,240 for an individual—get to lower their premiums. These are still happening.
The CSRs are the subsidies that are in danger. On Tuesday, Senators Lamar Alexander of Tennessee and Patty Murray of Washington worked out a deal to fund the CSRs through Congress for another two years in exchange for states getting more flexibility in how to structure their Obamacare plans. At a news conference, Trump appeared to support the legislation, but he later tweeted that he couldn’t support it. It remains to be seen whether it will pass. If it does, insurers could likely relax for two more years.