(Bloomberg) -- The federal budget deficit would increase by $194billion over the next decade if President Donald Trump followsthrough on his threat to halt ACA subsidy payments to health insurers, the Congressional BudgetOffice said.

Ending the so-called cost-sharing reduction payments would alsoboost premiums for mid-level Affordable Care Act plans by 20 percent nextyear, and by about 25 percent in 2020, the nonpartisan CBO saidTuesday.

The CSR payments, which help insurers lower deductibles andother out-of-pocket expenses for low-income people, have become aflashpoint in the political fight over Obamacare after Republicansin Congress failed to repeal or replace the law earlier thisyear.

Trump has threatened to cut off the payments to force Democratsto negotiate changes to the program, though lawmakers, insurers andregulators have called on the administration to continue them.

The administration hasn’t made a decision, Ninio Fetalvo, aWhite House spokesman, said in an e-mail.

“We continue to evaluate the issues,” he said.

Raise premiums

Without the payments, insurers have said they may drop out ofthe Affordable Care Act’s exchanges or substantially raisepremiums.

Insurers have said uncertainty over how the Trump administrationplans to run the law is contributing to large requested premiumincreases for next year.

Echoing previous comments from the president, who has referredto the subsidies as a “bailout,” Fetalvo said the health law willcontinue to fail with or without them, and must be repealed andreplaced.

CBO estimated that if the payments were halted, some insurerswould drop out of Obamacare next year, somewhat increasing thenumber of uninsured individuals.

But assuming no further disruptions, CBO figures insurers wouldreenter the market over the next few years, restoring options forindividuals.

After the initial shock, the increased premium subsidies wouldactually lead more individuals to buy insurance, CBO said.

The office also said the effects of ending the cost-sharingreduction payments would vary greatly depending on when the policyis enacted. If the changes were enacted midyear and insurers didn’thave time to adjust, more companies would exit markets, increasingthe number of people losing insurance while decreasing governmentspending.

The insurance subsidies are the subject of an ongoing legalbattle, after Republicans said they were illegal and successfullysued in 2014 to block them. The ruling is on hold pending adecision on an appeal started by the Obama administration, whichhas been handed over to Trump’s White House.

The current administration’s stance is that it could drop thecase -- and stop making the payments -- at any point.

However, a judge has ruled that a group of states can take upthe legal defense, potentially making it harder for the Trumpadministration to end them. Congress could also pass legislationsaying the payments should be made.

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