Trump’s sabotage of ACA will cause premiums to be 16% higher than if he had left ACA alone
Trump administration efforts to sabotage the Affordable Care Act, also known as Obamacare, will cause premiums to be 16% higher in 2019 than they would be if Trump had left the law alone, per a new report from the Kaiser Family Foundation:
With the effective repeal of the individual mandate penalty and the expansion of short term and association health plans, we set out to quantify how much of an upward effect these policy and legislative changes are having on 2019 premiums. Among insurers that publicly specify the effect of these legislative and policy changes in their filings to state insurance commissioners, we found that 2019 premiums will be an average of 6% higher, as a direct result of individual mandate repeal and expansion of more loosely regulated plans, than would otherwise be the case.
Adding the impact from the loss of cost-sharing reduction payments – which drove up silver premiums by an average of 10% according to the Congressional Budget Office – to the impact from individual mandate penalty repeal and expansion of more loosely regulated plans, this analysis suggests on-exchange benchmark silver premiums will be about 16% higher in 2019 than would otherwise be the case.
The upward effect on 2019 premiums due to the effective repeal of the individual mandate and expansion of more loosely regulated plans is in addition to other significant rate increases due to the Trump administration’s decision to halt cost-sharing reduction subsidy payments. This decision, the Congressional Budget Office estimates, is responsible for a 10% increase in 2018 on-exchange silver premiums.1 Altogether, on-exchange silver premiums in 2019 are therefore approximately 16% higher than would otherwise be the case if federal CSR payments had continued (the loss of which contributed approximately 10% to silver exchange premiums), the individual mandate penalty were still enforced, and more loosely-regulated plans were not expanding (the latter changes contributed an additional 6% to 2019 rates).2
Our analysis therefore suggests the average healthcare.gov benchmark silver premium for a 40-year-old would be approximately $427 per month (instead of $495) in 2019, if it were not for the repeal of the individual mandate penalty, expansion of short-term plans, and loss of cost-sharing subsidy payments.3
Donald Trump has been repeatedly telling his supporters how he has fixed the healthcare market by removing the individual mandate and by allowing short-term medical plans to be used as an alternative to ACA plans, while also saying that he is protecting coverage for people with pre-existing conditions. As usual with Donald Trump, none of what he is saying is actually true. Removing the individual mandate and allowing short-term medical plans to be used as an alternative is actually making health insurance more costly. In addition, short-term medical plans do not protect coverage for people with a pre-existing condition. It is basically junk insurance:
Applicants can be rejected for coverage if they take prescription medications or have a health condition, which the federal law prohibits for other types of insurance.
Short-term policies rarely cover maternity care.
Some cap the dollar amount of care they will cover.
They can’t be renewed and any medical conditions policyholders develop during the course of the policy can be excluded from coverage if they do re-apply.
In addition, the Trump administration halted cost sharing reduction payments and refused to back bipartisan legislation that would have reinstated them:
Yet another last-ditch effort to tackle the nation’s health-care system stalled within hours of its release by a bipartisan pair of senators Tuesday, with President Trump sending mixed signals and Republicans either declining to endorse the proposal or outright opposing it.
The week began on Capitol Hill with a renewed sense of urgency to craft legislation following Trump’s decision last week to end key payments to health insurers that help millions of lower-income Americans afford coverage but that the president argued were illegal under the Affordable Care Act.
The compromise offered by Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) on Tuesday proposes authorizing those payments for two years in exchange for granting states greater flexibility to regulate health coverage under the ACA. Those payments help offset deductibles and other out-of-pocket costs for low-income consumers who obtain insurance through the law; critics of Trump’s decision said eliminating the subsidies would cause insurers to back out of marketplaces across the country.
Besides raising the price of ACA premiums with these actions, the Trump administration’s sabotage of Obamacare has also resulted in an increase in the number of uninsured for the first time in several years:
As of May 2018, the numbers of people in the U.S. without health insurance have risen to 15.5%, up from 12.7% two years ago, according to the latest Commonwealth Fund tracking survey. This translates to an increase of four million uninsured people nationwide.
No matter what lies Donald Trump tells his supporters, the facts show that Donald Trump’s actions to sabotage Obamacare have led to less people with insurance, and higher premiums, and soon will lead to more people with junk insurance. And it all seems to stem from a neverending desire by Donald Trump to undo everything Barack Obama did, all out of spite.