President Donald Trump said in April he might withhold payment of subsidies on the Obamacare exchanges for customers who have very low incomes in order to bring Democrats to the negotiating table.
That would result in the government having to give more substantial tax credits to more customers, which could bring more people to the Obamacare exchanges, according to analysts at Oliver Wyman.
If the subsidies are removed and credits are increased, more people could then get insurance policies at low cost or no cost, which could bring more people onboard the exchanges.
"People can take that higher subsidy and buy any plan on the exchange that they want," according to Dianna Welch, the Oliver Wyman report's co-writer, said in an NPR report.
The exchanges require policies at four levels: bronze, silver, gold, and platinum. The lowest level, bronze, covers 60 percent of a customer's costs with lower monthly premiums. The highest level, platinum, has a higher monthly cost but covers 90 percent of healthcare costs.
The government only pays subsidies for silver-level plans, one step above bronze. So rates would increase around 19 percent if the Trump administration cut out those subsidies, according to an April analysis by The Kaiser Family Foundation.
Wyman's analysis offered an example in Phoenix, Ariz., in which people age 40 with incomes up to 250 percent of the federal poverty line could get a free bronze insurance plan. In Detroit, consumers could get a gold plan for only $3 more than silver.
Subsidies would also rise because the silver plan rose, according to NPR. Customers could then purchase a more expensive silver plan, or get a less costly bronze plan.
Kaiser's April report said federal costs of higher tax credits would cost 23 percent more than any savings from cutting out cost-sharing reduction payments. For fiscal year 2018, that would cost $2.3 billion, according to Kaiser.
A White House healthcare adviser said "there's a desire" to include funding for Obamacare subsidies for low-income people in the Republican healthcare bill, according to Bloomberg BNA.
"That's for Congress to consider," said Brian Blase, special assistant to the president in the National Economic Council, according to the Bloomberg report.
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