Donald Trump has long predicted the implosion of Obamacare. He just took a huge step to fulfilling his own prophecy.
The White House announced late Thursday morning it would cut off a key Obamacare subsidy that makes copayments and deductibles more affordable for low-income Americans. Trump pulled the trigger on the plan late Thursday night.
Trump has spent months toying with the idea of ending these payments, which are drawn from a $7 billion fund set up specifically to cover these costs. House Republicans have challenged these payments in court, arguing that they were never appropriated in Obamacare and thus being illegally distributed.
There is no question that this new policy is lose-lose-lose for key stakeholders with no upside:
- It will raise Obamacare premiums by an estimated 20 percent in 2018, as health plans have to charge more to make up the lost funds. By 2020, premiums would increase 25 percent due to this change.
- Pulling the plug actually increases the national deficit. As those insurance plans make double-digit rate increases, the government will have to spend billions more on the other subsidies that 10 million Americans receive to purchase that coverage.
- The Congressional Budget Office estimates that this move will ultimately cost the government $194 billion over the next decade.
- The number of uninsured Americans would rise by one million people in 2018, in the CBO’s estimate.
- Insurance companies lose out, too, particularly those that assumed Trump would pay these subsidies and set their premiums accordingly. They now stand to face significant financial loses on the Obamacare marketplaces.
To recap: Trump is enacting a policy where the government spends billions more to insure fewer people.
This is a policy that helps nobody and hurts millions. And that is actually different from the other health care policies Trump and congressional Republicans have pursued.
The executive order Trump signed yesterday, for example, would let skimpier health insurance plans back into the individual market. That would benefit people who are young and healthy (and don’t want to spend a lot on premiums) at the expense of making it worse for those who are old or sick — a 180 from the point of Obamacare. (Republican plans in Congress to repeal Obamacare, too, would have advantaged certain groups of people while disadvantaging others.)
This decision is perhaps the most aggressive one Trump has made so far in his committed push to explicitly undermine the key objectives of the law.
Ending these payments raises premiums for anyone who uses Obamacare: older people, younger people, sicker people, and healthy people. And it puts an already fragile Obamacare marketplace at greater risk of a last-minute exodus by health plans who assumed that the government would pay these subsidies — and don’t think they can weather the financial hit.
The Trump administration has, since taking office, cut the Obamacare open enrollment period in half. Instead of 90 days to sign up, enrollees will now get 45. The Trump administration has cut the Obamacare advertising budget by 90 percent — and reduced funding for in-person outreach by 40 percent. Regional branches of Health and Human Services abruptly pulled out of the outreach events they have participated in over the last four years.
Obamacare is, in Washington, a political football — something Republicans have spent seven years promising to repeal. Now, Trump is doing more than Congress ever could to make good on that promise.
Trump’s larger presidential agenda has focused on unwinding Barack Obama’s legacy. He’s more focused on destroying his nemesis than trying to replace, to fix, or to improve Obama’s biggest accomplishments from the Iran deal to environmental regulation.
On health care, there are going to be immediate and very real consequences for Americans. There are real people who stand to be hurt by an administration that has actively decided to make a public benefits program function poorly.
Trump has long predicted the implosion of the Affordable Care Act. It’s now become clear he plans to use the White House to tear down his predecessor rather than to help the people who voted him into office.
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