Guest editorial:
President Trump sabotages Obamacare.
After delivering yet another malicious blow to the Affordable Care Cat, President Trump took to Twitter (of course) on Friday to tell Democrats that they “should call me to fix” the law he’s sabotaging . ...
The fact is, a handful of Republicans and Democrats have been trying to work out a compromise on how to address the most problematic aspect of the ACA: the state exchanges where private insurers sell policies to people not covered by group health plans. Competition has been dwindling and premiums rising fast in a number of states, particularly in less populous counties.
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We tried the latter approach before, and it left tens of millions of people uninsured while saddling sicker Americans with doubledigit premium increases and steadily growing deductibles throughout the early 2000s. The ACA moved the country away from that unworkable system — until Thursday, when Trump took two steps to push the country back in that old, failed direction.
The first was an executive order calling on federal agencies to help the roughly 20 million people not covered by large group plans shop outside the state exchanges for policies that aren’t governed by the ACA’s insurance requirements. The new rules and guidelines, which will take months to develop, aim to promote thinner policies that cover fewer risks but carry lower premiums. That trade-off would be especially appealing to younger, healthier consumers who don’t see the need for comprehensive insurance.
Encouraging people to leave the exchanges, though, defeats the main purpose of these marketplaces: to create big regional risk pools to hold down premiums by spreading health-care costs broadly. And the likely consequence is that the state exchanges will be left serving only those people who do need comprehensive coverage — those in dangerous lines of work or with preexisting conditions that might be excluded from thinner plans. And the insurers that serve them will wind up charging even higher premiums to cover the higher cost per enrollee. In short, pulling healthier people out of the state exchanges will only exacerbate the problem of rising premiums that Republicans claim to want to fix . ...
Which brings us to the other, even more dramatic step Trump took Thursday: the White House’s late-night announcement that it would no longer reimburse insurers for the cost of reducing the deductibles, co-pays and other out-of-pocket expenses incurred by their lowest-income customers . ...
The move will cost insurers about $7 billion a year, but that cost will still largely be passed on to federal taxpayers. To make up for the lost reimbursements, most states plan to let insurers charge higher premiums in the exchanges next year, assuming the insurers continue to do business there — which may not be a safe assumption. Because the vast majority of those buying policies in the exchange have their premiums subsidized by the federal government, the higher premiums will result in higher subsidy payments. So the pain of Trump’s decision will be felt by the U.S. Treasury . ...