Browsing the blog archivesfor the day Monday, October 16th, 2017.


Trump Owns the Health Care Mess

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Trump Maladministration

It’s clear that Trump has no clue how the Affordable Care Act works. But then, few Republicans in Congress do, either, including their alleged policy wonk, Paul Ryan. Trump’s understanding of the health care law probably came from them.

Today Trump explained his reasons for ending the cost-sharing subsidies, a move that will raise everybody’s premiums.

That was a subsidy to the insurance companies and a gift that was what they gave the insurance companies. Take a look at where their stock was when Obamacare was originally approved and what it is today. You will see numbers that if you invested in the stocks, you would be extremely happy. They have given them a total gift. They have given them — you can almost call it a pay off. It’s a disgrace. That money goes to the insurance companies. We want to take care of poof people and people that need help with health care.

I’m never going to get campaign contributions from the insurance companies, but take a look at how much money has been spent by the Democrats and by the health companies on politicians generally, but take a look at the coffers of the Democrats.

The CSR payments have actually brought Republicans and Democrats together. We got calls, emergency calls from the Democrats and I think probably the Republicans were also calling them saying let’s come up with at least a short-term fix of health care in this country. And the gravy train ended the day I knocked the insurance companies’ money. Which was last week. Hundred of millions of dollars handed to the insurance companies for very little reason. Believe me. I want the money to go to the people, to poor people that need it. Not to insurance companies which is where it’s going,  as of last week I ended that.

In other words, Trump seems to think that the payments were some kind of bribe to the insurance industry, not something that paid for an actual benefit.

According to the Center for Responsive Politics, the insurance industry altogether gives a lot more money to Republicans than to Democrats. The biggest health insurance donor, Blue Cross/Blue Shield, in 2016 gave $450,330 to Republicans and $229,840 to Democrats.  The single biggest recipient of insurance industry money in Congress is Paul Ryan.

Donations from insurance industry, 2016, Center for Responsive Politics

The insurance industry (all types) gave more money to Hillary Clinton than to Donald Trump last year, though, which may be one reason he’s angry at them.

The cost-sharing subsidies that Trump axed are different from the tax credits used to buy subsidized insurance, but losing those subsidies will hit everyone hard, especially poor people.

The cost-sharing subsidies were designed to reduce out-of-pocket costs such as deductibles and co-pays for people with incomes from 100 percent to 250 percent of the federal poverty level. About 7 million people are receiving these subsidies in 2017, more than half of the people who buy insurance on the ACA exchanges, according to data from the Kaiser Family Foundation.

Insurers provide the subsidies to consumers, and the federal government reimburses insurers for the higher costs. Those reimbursements are estimated to total $7 billion this year and as much as $9 billion in 2018. At the same time, cost-sharing payments are expected reduce low-income consumers’ deductibles by as much as $3,354 each and out-of-pocket medical expenses by as much as $5,587, reported KFF.

Cost-sharing subsidies are different from the tax credits that qualified consumers receive to help offset the exchange-based premiums. Without the subsidies, medical expenses will become unaffordable for many low-income families, even if they purchase insurance.

Insurers are saying that as a result of the loss of this subsidy they will hike up everybody’s premiums by 20 percent and probably will push a lot of insurers out of the market altogether. The hike will likely be worse for those who buy insurance through ACA. This just in, from Pennsylvania

Obamacare health insurance premiums in Pennsylvania will jump an average 30.6 percent in 2018, nearly four times the increase that had been anticipated before cost-sharing reductions for the coverage were scrapped last week.

The original projection had been for an average 7.6 percent rate increase for individual health insurance plans purchased through the Affordable Care Act’s government exchange.

See also What Affordable Care Act Rollback Means For The Health Care Insurance Industry at NPR.

Whatever happens to health care premiums now, Republicans will own it. Trump will own it. He doesn’t seem to grasp that; last July he actually said,

“I think we’re probably in that position where we’ll let Obamacare fail,” Trump said at the White House. “We’re not going to own it. I’m not going to own it. I can tell you, the Republicans are not going to own it.”

But that’s not something he gets to decide. Ezra Klein says,

Trump’s decision to choke off the federal payments stabilizing premiums and insurance markets is based on a similar theory — bad policy will lead to political pain, which will give Republicans negotiating leverage …

… The problem with this theory is that Democrats no longer hold the White House, or anything else. Republicans, led by Trump, hold total power. They are the governing party, and they stand to absorb the blame for the state of the country. According to an August poll by the Kaiser Family Foundation, by a margin of 60 to 28 percent, Americans now say Republicans are now responsible for the Affordable Care Act.

I agree. People may not understand what Trump did, but they know he did something. And whatever happens to their costs and access to health care from now on, that’s on Trump.

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