“In a move likely to roil America’s insurance markets, President Donald Trump will “immediately” halt payments to insurers under the Obama-era health care law he has been trying to persuade Congress to unravel for months….
“…. the White House said the government cannot legally continue to pay the so-called cost-sharing subsidies because they lack a formal authorization by Congress. Officials said a legal opinion from the Justice Department supports that conclusion…
Experts have warned that cutting off the money would lead to a double-digit spike in premiums, on top of increases insurers already planned for next year. That would deliver another blow to markets around the country already fragile from insurers exiting and costs rising. Insurers, hospitals, doctors’ groups, state officials and the U.S. Chamber of Commerce have urged the administration to keep paying…
Consumers who receive tax credits under the ACA to pay their premiums would be shielded from those premium increases. But millions of others buy individual health care policies without any financial assistance from the government and could face prohibitive increases. Taxpayers would end up spending more to subsidize premiums.” (B)
“ “Massive subsidy payments to their pet insurance companies have stopped,” Trump said in a Tweet early Friday morning, alluding to the support of Democrats in Congress for CSRs.
But the CSRs are a pass-through from the government through the insurer and directly to the patient. Thus, a single-digit rate increase becomes a rate increase of 20%-25% without the CSRs, insurers have warned for months now.
“These payments are not a bailout – they are passed from the federal government through health plans to medical providers to help lower costs for patients who see a doctor to treat their cancer or fill a prescription for a life-saving medication,” America’s Health Insurance Plans and the Blue Cross Blue Shield Association said in a joint statement Friday morning.
Most insurers, including Anthem, Oscar Health, Centene, Molina and Blue Cross and Blue Shield plans, will still make money if Americans buy their plans because customers will have to pay much higher rates thanks to Trump’s move. The end to CSRs, though, could prevent many from buying the policies in the first place or paying their out-of-pocket costs….” (C)
“The Trump administration is hinting that it will continue to enforce the ObamaCare mandate requiring Americans to have health insurance coverage. An administration document obtained by The Hill that accompanies an executive order signed by President Trump Thursday states that “only Congress can change the law” when it comes to the mandate.
“Will the Administration be enforcing the individual and employer mandates?” the question and answer document asks.
“While HHS has the ability to define a hardship exemption for the purpose of the individual mandate, the tax penalties are contained in the Internal Revenue Code and only Congress can change the law,” the document states in response, referring to the Department of Health and Human Services.
The statement leaves some room for creating more exemptions to enforcement of the mandate, noting that the administration can offer “hardship exemptions.” But it emphasizes that only Congress can change the law that mandates penalties for not having coverage…..” (D)
“The combined effect of cutting off the insurance payments and the executive order will be to destabilize the A.C.A.’s individual market, which is used by nine million people to buy health insurance. Younger and healthier people will be tempted to buy a skimpy short-term policy with low premiums and switch to a policy that complies with the A.C.A. only when they need medical care. Knowing that they will no longer receive cost-sharing payments and that Obamacare policies will tend to attract older and sicker people, insurers will probably jack up premiums or withdraw altogether in sparsely populated counties.
State governments, public interest groups and others will seek to prevent some of the damage from the order. There is some hope that they will be able to shape the regulations during the public comment period. If the final rules are still harmful, some groups will most likely file lawsuits….(E)
“White House Chief of Staff John Kelly told reporters that there probably won’t be a new Obamacare repeal bill until the spring and declined to join President Trump in attacking Senate Republican leadership…
“We probably won’t have a healthcare bill until the spring,” he said. “This was a way to take care of as many Americans as he could legally with an executive order.”…”Congress is designed to be extremely complicated, slow-moving part of our government,” he said. “I have nothing but respect for members of Congress and the staffs that work for them.” (F)
“In theory, precipitously ending the payments could lead to catastrophic market failures. Insurers set prices for their insurance this year, assuming the payments would continue to be made, and have no ability to raise them midyear to cover their losses. But, because the president has repeatedly signaled that the payments might cease and we are nearing the end of 2017, many plans set their prices for next year’s products assuming the subsidies would not be paid.
A few months ago, we called those increased prices an uncertainty tax. The uncertainty is gone now. But the conservative planning of the insurance industry means that many insurers can afford to keep offering insurance, even after the president cuts off the funding. Plans that priced for the threat will take a small haircut this year, but they can still make money, even without the payments, next year.” (G)
“Even before Mr. Trump’s decision, Senators Lamar Alexander, Republican of Tennessee, and Patty Murray, Democrat of Washington, were working on legislation to extend the subsidies, paired with other measures to offer states more flexibility regulating health plans offered under President Barack Obama’s health law.
But Republicans in Congress are divided. Some worry that ending the subsidies would hurt their constituents. Others are loath to do anything that could be seen as propping up the health law that they had promised to tear down.
For their part, Democrats are convinced that any blame for rising premiums and shrinking choices will fall on Republicans, who now control the White House and Congress. After spending the year trying to preserve the Affordable Care Act, Democrats did not appear ready on Friday to make major concessions.” (H)
“But there’s another question here, which is the electoral consequence. If health insurance gets worse, will people blame Barack Obama and the Democrats, or Donald Trump and the Republicans?” (I)
(A) Trump vows to rip apart Obamacare piece by piece, http://abcnews.go.com/WNT/video/trump-vows-rip-obamacare-piece-piece-50472671
(B) Trump to issue stop-payment order on health care subsidies, by ricardo alonso-zaldivar, http://abcnews.go.com/Health/wireStory/trump-halt-subsidies-health-insurers-50455624
(C) Trump’s Termination Of Obamacare Subsidies Hurts Patients, Not Insurers, by Bruce Japsen, https://www.forbes.com/sites/brucejapsen/2017/10/13/trumps-end-to-subsidies-hurts-patients-not-insurers/#525cb1444c61
(D) Trump administration hints at enforcing ObamaCare mandate, BY PETER SULLIVAN, http://thehill.com/policy/healthcare/355144-trump-administration-hints-at-enforcing-obamacare-mandate
(E) Congress Can’t Let Mr. Trump Kill Obamacare on His Own, https://www.nytimes.com/2017/10/12/opinion/editorials/congress-cant-let-mr-trump-undo-obamacare-on-his-own.html?_r=0
(F) John Kelly: Obamacare repeal effort likely to return in spring, by Robert King, http://www.washingtonexaminer.com/john-kelly-obamacare-repeal-effort-likely-to-return-in-spring/article/2637332
(G) Trump Is Trying to Gut Obamacare. Here’s Why His Plan May Fail, by Margot Sanger-Katz, https://www.nytimes.com/2017/10/13/upshot/trump-is-telling-obamacare-insurers-he-doesnt-support-the-market.html
(H) End to Health Care Subsidies Puts Congress in a Tight Spot, By THOMAS KAPLAN and ROBERT PEAR, https://www.nytimes.com/2017/10/13/us/politics/trump-congress-obamacare-insurance-subsidies.html
(I) Trump’s Head-Scratching Health-Care Moves, by Jonathan Bernstein, https://www.bloomberg.com/view/articles/2017-10-13/trump-s-head-scratching-health-care-moves