CBO: Trump sabotage of ‘Obamacare’ would send premiums and the deficit skyward

The Trump administration is going to have to file a status report in House v. Price regarding its position on the continuation of cost-sharing subsidies to insurance companies under “Obamacare.”

On August 1, the D.C. Circuit Court of Appeals granted the motion for leave to intervene filed by several state attorneys general and the District of Columbia. As part of that order, the Court ordered “the case shall continue to be held in abeyance. Appellee, appellants, and intervenors are directed to file status reports at 90-day intervals.” A status report was due on or about August 22 after a continuation in May.

[T]his bizarre lawsuit could still blow up the ACA insurance markets:

A pending court case, House v. Price (née House v. Burwell — and so much turns on the name change), has given the administration a bomb it could use to blow up insurance markets across the country. At stake is the legality of the payments the federal government makes to insurance companies to help cover the medical expenses of low-income people.

If Obama’s appeal continues, then the payments continue. But if President Trump or Attorney General Jeff Sessions were to decide not to continue the appeal, that’s a game changer.

By moving to defuse House v. Price, the Trump administration could signal that it means to make the best of Obamacare. At the same time, however, the case may represent the last best chance to rip the statute up from the roots. Skittish insurers are watching closely to see what the administration will do. Time is short: Insurers will have to decide very soon whether they want to participate on Obamacare’s exchanges in 2018.

Without the subsidies, insurance markets could quickly unravel. Even more insurers could withdraw from the public marketplaces where more than 10 million Americans obtained coverage last year.

The Congressional Budget Office (CBO) issued its analysis today what will happen if President Trump follows through on his repeated threats to sabotage “Obamacare” by discontinuing the cost-sharing subsidies.  Trump Threat to Obamacare Would Send Premiums and Deficit Skyward:

Premiums for the most popular health insurance plans would shoot up 20 percent next year, and federal budget deficits would increase by $194 billion in the coming decade if President Trump carries out his threat to end certain subsidies paid to insurance companies for the benefit of low-income people, the Congressional Budget Office said Tuesday.

Even before efforts to repeal the Affordable Care Act collapsed in the Senate last month, Mr. Trump began threatening to cut off the subsidies, called cost-sharing reductions. He said the health care law would “implode” and Democrats would have no choice but to negotiate a replacement plan. Mr. Trump described his strategy as, “Let Obamacare implode, then deal.”

Those threats continue, though each month, the Trump administration has issued the subsidies.

The nonpartisan budget office has now quantified the cost of the threats, and potentially handed Democrats a weapon to force Congress and the administration to keep the money flowing.

“Try to wriggle out of his responsibilities as he might, the C.B.O. report makes clear that if President Trump refuses to make these payments, he will be responsible for American families paying more for less care,” the Senate Democratic leader, Chuck Schumer of New York, said. “He’s the president and the ball is his court — American families await his action.”

If Mr. Trump stops paying the subsidies, the budget office said, insurers will increase premiums for midlevel “silver” plans, and the government will incur additional costs because, under a separate program, it provides financial assistance to low-income people to help them pay those premiums. Insurers in some states would withdraw from the market because of “substantial uncertainty” about the effects of the cutoff.

“About 5 percent of people live in areas that would have no insurers” in the individual insurance market in 2018, the budget office said.

The federal government helps pay premiums for low-income people by providing them with tax credits.

“Gross premiums for silver plans offered through the marketplaces would be 20 percent higher in 2018 and 25 percent higher by 2020 — boosting the amount of premium tax credits according to the statutory formula” established in the Affordable Care Act, the budget office said.

* * *

The dispute over the subsidy payments dates back to 2014, when House Republicans filed a lawsuit asserting that the Obama administration was paying the subsidies illegally because Congress had never appropriated money for them. Last year, a federal judge agreed. The judge ordered a halt to the payments, but suspended the order to allow the government to appeal. The case is pending before the United States Court of Appeals for the District of Columbia Circuit.

The Trump administration has been providing funds for cost-sharing subsidies month-to-month, with no commitment to pay for the remainder of this year, much less for 2018.

Mr. Trump and some Republicans in Congress call the payments a bailout for insurance companies. But under the Affordable Care Act, insurers are required to provide the discounts to low-income people, who they say are the real beneficiaries.

Doctors, hospitals, insurers, consumer groups and the United States Chamber of Commerce have all urged Mr. Trump to continue paying the cost-sharing subsidies.

But we have a small, vindictive man who is obsessed with Barack Obama and wanting to erase everything Obama did as president. Trump is ‘obsessed with Obama’ and cares only about undoing his policies, European officials say. In pursuit of this obsession, Trump will not hesitate to intentionally harm millions of Americans by blowing up “Obamacare.”

UPDATE: Health insurance premiums for 2018 are on the rise for many, and for that, most of the blame falls squarely on the shoulders of President Trump. How Donald Trump Is Driving Up Health Insurance Premiums:

In recent days, a bevy of insurers have announced significant increases for Americans who purchase their coverage on the exchanges: a minimum of 12.5 percent by Covered California, 34 percent by Anthem in Kentucky and 43.5 percent by Medica in Iowa, to name just a few.

Still more hikes may come from these insurers and others, who cite uncertainty around the Affordable Care Act as the principal culprit in this disturbing trend.

Reinforcing these developments is an analysis by Charles Gaba of acasignups.net, who projected that at the moment, average premium increases next year are likely to total around 29 percent.

Of that, just 8 percentage points will result from medical inflation, and 2 percentage points will stem from the reinstatement of an Obamacare health insurance tax; the balance will be related to the uncertainty that Mr. Trump has created around key pieces of Obamacare.

The largest portion of the total — about 15 percentage points — is connected to the potential demise of the cost-sharing reductions (known as C.S.R.s), payments made by the government to insurers to help cover out-of-pocket costs like co-pays and deductibles that lower-income Americans can’t afford.

* * *

President Trump has threatened to end the subsidies but has yet to take definitive action. A decision was promised by Aug. 4, but Mr. Trump decamped to his New Jersey golf resort with nary a word about C.S.R.s.

As a result, many of the insurance companies that have already announced their increases have either baked in increases assuming loss of the subsidies or say that they will impose further hikes if the subsidies are not continued.

The silence around the C.S.R.s is consistent with the new administration’s overall approach to the A.C.A.: continually badmouthing it and taking small steps to undermine it without unleashing a full-force assault.

One Response to CBO: Trump sabotage of ‘Obamacare’ would send premiums and the deficit skyward

  1. For Sure Not Tom

    Yep, Trump’s been saying he’s going to let the ACA fail and that he’s not responsible.

    Except that he is. If you know something is broken and you do nothing you’re usually considered liable when people get hurt.

    The GOP has been inserting ACA time bombs into other legislation and some Red states have been helping, too.

    I can’t imaging belonging to a political party that would intentionally harm it’s own members.

    The Dems may not take back the House or Senate in 2018, but I’m pretty sure they’re going feel some pain from this.