Congress Should Fund Obamacare Subsidies - or Trump Must Stop Them
- Author: Jack Mann Aug 18, 2017,
Aug 18, 2017, 0:31
They are a payment to insurance companies authorized by the Affordable Care Act that covers the cost of providing lower deductibles and co-pays for people earning less than 250 percent of the federal poverty level.
Yet, remarkably, for the first seven months of the Trump administration, the payments have continued without disruption.
For months, Trump has been raising the prospect of terminating payments as a way to trigger a crisis and get Democrats to negotiate on a health care bill.
"If ObamaCare is hurting people, & it is, why shouldn't it hurt the insurance companies & why should Congress not be paying what public pays?"
Democrats seized on the report as proof that Trump was "sabotaging" the ACA markets.
Trump agreed to pay insurers on August 21, but this battle isn't over.
President Donald Trump's threat to "let Obamacare implode" took on a whole new meaning this week with a report released by the Congressional Budget Office that found such a strategy could lead to, among other things, bigger federal deficits in future years. That leaves two counties at risk of having no insurers selling plans next year - Menominee County in Wisconsin and Paulding County in Ohio. Ending them would cause insurance premiums to rise sharply and thereby increase the cost of other government subsidies, the budget office said.
Obamacare's exchanges are still fragile: Many insurers raised premiums and pulled out of some markets previous year after finding the customers who signed up tended to be sicker and more expensive than they hoped. Health plans might decide to bolt the Obamacare markets altogether if the payments go away.
The CBO report confirms earlier analyses, including this one by Kaiser and this one from the consulting firm Oliver Wyman, that suggested eliminating the cost-sharing payments could make policies cheaper for some individuals.
On July 30, Health and Human Services Secretary Tom Price disclosed that the administration had not decided whether to discontinue the subsidies.
Some companies have filed for double-digit rate increases in the event these cost-sharing reduction payments are not made. The House argued that because Congress had never explicitly appropriated the funds for those payments, the administration's actions were unconstitutional.
Vullo insisted that New York's marketplace remains sound and that federal cost-sharing subsidies and tax credits will help reduce the impact of the rate hikes.
Hundreds of US counties are at risk of losing access to private health coverage in 2018 as health insurers consider pulling out of those markets in the coming months.
"Canceling these payments altogether, as President Trump has repeatedly threatened, will increase premiums by 25 percent in 2020 and increase the deficit by almost $200 billion over the next decade", Dach said.