President Donald Trump took to Twitter Saturday morning to celebrate after taking active steps to sabotage Obamacare — and he’s using the stock market as an affirmation for his decision.
On Thursday, the White House announced it would end Obamacare subsidies that help low-income Americans pay for health insurance. On Friday, health care stocks took a sharp dive. And on Saturday, Trump tweeted this:
Health Insurance stocks, which have gone through the roof during the ObamaCare years, plunged yesterday after I ended their Dems windfall!— Donald J. Trump (@realDonaldTrump) October 14, 2017
Several folks on Twitter pointed out how odd it is that the president just spiked the football after sabotaging an entire industry:
I know he's playing a populist game here, but man alive is it weird to see a president bragging about hurting the stock market. https://t.co/D4z2iQDf5l— Jared Yates Sexton (@JYSexton) October 14, 2017
There's so much to unpack, but he's now celebrating stocks falling when using stock market increases as proof he's doing well https://t.co/G760PsfGbJ— Emily C. Singer (@CahnEmily) October 14, 2017
congrats? https://t.co/oN73NPaZdR— Sam Stein (@samstein) October 14, 2017
But more than that, he just spiked the football after creating a lose-lose-lose situation, which is how my colleague Sarah Kliff describes it.
Why is Trump congratulating himself for the stock market falling?
Trump is treating the stock dip as an indication of a win because these cost-sharing subsidies, or CSRs, are actually paid out to insurance companies, which is likely why Trump is calling it a “windfall.”
But it’s not free money; the funds help insurers offset the lowering copays and deductibles for low-income Americans under Obamacare — people making up to 250 percent of the federal poverty level, which is about $30,000 for a single person. In short, it’s money that helps more people afford health insurance.
The reason the White House can just stop payments to insurance companies is because of a 2014 lawsuit filed by House Republicans, which alleged CSR payments were illegal because Congress never approved the payments in a separate spending bill.
A federal judge agreed — but suspended the decisions so the Obama administration could appeal. Soon thereafter, Trump won the election and House Republicans asked the judge to postpone the lawsuit to allow the new administration to figure out what to do. (My colleague Dylan Scott has a comprehensive explainer here.)
Trump is also claiming this will expand access. The CBO says otherwise.
Trump also tweeted this Saturday morning:
Very proud of my Executive Order which will allow greatly expanded access and far lower costs for HealthCare. Millions of people benefit!— Donald J. Trump (@realDonaldTrump) October 14, 2017
As Kliff writes, this decision is a bad situation for, well, everyone — and the Congressional Budget Office projects that it would do the opposite of expanding access.
- It will raise premiums by an estimated 20 percent.
- It increases the national deficit and will cost the federal government $194 billion over the next decade.
- And cause about a million people to lose coverage.
In addition, it even hurts insurance companies, especially those who didn’t assume Trump would take this action and adjust prices accordingly.
Now, to be clear, it doesn’t change much for people receiving Obamacare subsidies — those earning up to 400 percent of the federal poverty level, which works out to about $48,000 for an individual. That’s because Obamacare puts a cap on how much those people can pay.
It does hurt people who are buying their coverage on the exchange and don’t get any subsidies. Some insurance companies have already adjusted their premium prices on these largely middle-income Americans to offset the federal payments they won’t receive.
Of course, Congress could act to reinstate the CSR payments, and as Dylan Scott writes:
Now, following the failure of Senate Republicans to repeal the law, an increasing number of them are turning toward a bipartisan health care solution — one that is likely to include funding for CSRs. Top Senate Republicans and Democrats had neared an agreement on an Obamacare fix package which would fund the payments, but they have not yet finalized a deal that could be brought up for a vote.
- VoxCare answers five important questions about this stoppage of CSR payments.
- Here’s a clear explanation of who this hurts and who is still protected.
- Why the outcomes here are lose-lose-lose. No one wins.
- According to wonks at Balloon Juice blog, we could have a situation where it’s cheaper to buy a higher-level plan.