Debt Ceiling Trigger Could Increase Health Insurance Premiums

Larry Levitt and Gary Claxton of the Kaiser Family Foundation explain the implications of the debt ceiling’s trigger cutting back on the cost-sharing subsidies in the Affordable Care Act: “So, the direct effect of a triggered budget cut would be that low-income enrollees would still get improved coverage, but insurers would be paid less for providing that coverage. Insurers probably would try to recoup these losses by charging higher premiums (which would, in turn, also lead to higher federal tax credits). This might also make private plans reluctant to serve lower-income enrollees, and they could take steps to try to avoid that part of the market.”