Health insurance premiums for many customers on the Obamacare individual insurance markets are expected to surge around 20% in 2018 if US President Donald Trump eliminates a crucial subsidy for payments to health insurers, according to a report by the Congressional Budget Office (CBO).

The CBO said that cutting down the payments for the Affordable Care Act (ACA), also known as Obamacare, will sharply force up insurance costs and expand the US deficit.

If the government terminates the subsidy on health insurance, the federal deficit would increase by $194bn from 2017 through 2026.

The report said that abolishing the government’s financial assistance of ‘cost-sharing reductions’ (CSR) for low-income Americans would force insurers to increase premium prices to cover CSRs.

The report further revealed that if the US government stops payment of the subsidies, insurers will increase premiums for midlevel ‘silver plans’, and the government will incur additional costs under the Affordable Care Act.

The subsidy cut will force nearly 5% Americans to live in areas without any insurance coverage in the individual market in 2018.

Obama’s Affordable Care Act, which sought to expand health insurance coverage, provided CSRs to people and families income between 100% and 250% of the federal poverty level (FPL). The subsidy helped the Americans to slash or abolish their co-pays and outright expenses for health treatment.

In its study, the CBO found that the number of uninsured people is expected to slightly higher in 2018; however it will slightly decline in 2020 as more insurers joined the market.