End of cost-sharing reimbursements for insurance companies will unexpectedly lead to a better deal for some Obamacare policyholders

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Title : End of cost-sharing reimbursements for insurance companies will unexpectedly lead to a better deal for some Obamacare policyholders
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End of cost-sharing reimbursements for insurance companies will unexpectedly lead to a better deal for some Obamacare policyholders

President Trump’s decision to cancel Obamacare subsidies could have an unexpected benefit for some consumers, if they shop for it.

Trump stopped reimbursing insurance companies for cost-sharing discounts Obamacare gives to lower- and moderate-income policyholders, but "State regulators and insurers anticipated that Trump would cut off the subsidy payments," Peter Sullivan reports for The Hill, a Washington, D.C. publication.

So, they raised premiums on the most common type of Obamacare policy: the "silver" plan, which is used to calculate consumer subsidies.

"If the plans are more expensive, people get a bigger subsidy. So the higher premiums lead to bigger subsidies, which consumers can now use to buy another type of plan, even a more generous 'gold' plan," more cheaply than before, Sullivan explains. "The result is that the majority of Obamacare enrollees are either held harmless or actually able to buy coverage at a lower cost than if Trump had not cut off the payments."  

However, policies from last year are automatically renewed, so policyholders will need to shop for a better deal on healthcare.gov.

"Many consumers are confused, given the debate over repeal of the law and the surrounding frenzy, and might be hit with a premium increase because they did not realize they could find a better deal on a different plan," Sullivan writes. "The Trump administration has cut back on outreach funding, which experts say could depress enrollment and lead to fewer ways for consumers to get their questions answered."

Topher Spiro, vice president for health policy at the left-leaning Center for American Progress, told Sullivan, “Even despite best efforts to educate consumers, it's going to be really hard to get out the word that there are better deals out there. In practice, in reality, there are going to be a lot of consumers who see increased costs because of this.”


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