The analysis from the Kaiser Family Foundation comes as Congress is wrestling with whether to fund the payments in exchange for reforms to Obamacare. President Trump announced earlier this month that he would stop making the payments through the executive branch, a strategy that created legal problems for President Obama because Congress never appropriated the money.
Insurers in many states are using silver plans, the most popular of Obamacare’s three metal tiers, to shoulder the brunt of the cost of losing the payments. Because the other set of Obamacare subsidies to help individuals purchase insurance are tied to the price of silver plans, some insurers have worked with states to target those plans for premium hikes, which in turn results in more subsidy money. Premiums in 32 states on silver plans will increase from 7 percent to 38 percent, Kaiser found. Other plans, such as bronze and gold, have tended to have lower increases.
The impact on Obamacare customers on the individual market, which is used by people that don’t have insurance through a job or the government, will vary depending on the plan they get.
The income-based tax credits are pegged to the cost of the second cheapest silver plan, so a major increase to silver plan premiums will lead to higher tax credits. People that earn too much for tax credits may face the surcharge if insurers applied their rate increase across the board and not just on silver, Kaiser said.