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For months, President Trump has been trying to sabotage people’s health care, saying that “The best thing we can do…is let Obamacare explode.” and “Let it be a disaster because we can blame that on the Democrats.” As part of his ongoing efforts to undermine the Affordable Care Act – and with it people’s access to affordable coverage – he keeps threatening to cancel the cost sharing reduction payments forcing an increase ins deductibles and out-of-pocket costs for the majority of those covered through the Health Insurance Marketplaces. He’s using the threat as revenge for the failure of his health care repeal thus far and a cudgel to force Congress to pass repeal.
Who will pay the price for Trump canceling these cost sharing reduction payments? The middle class will bear the brunt of the costs with a 19% premium hike. In fact, the The GOP Chairman of the Senate Health Committee, Lamar Alexander, said: ‘Without payment of these cost-sharing reductions, Americans will be hurt.”
Independent analysis from the Kaiser Family Foundation has found that defaulting on these payments will force people to pay an additional 19 percent more for their coverage this year. That’s on top of the already expected double digit rate increases and this increase would most strongly hit middle class families. For most people with marketplace coverage, this premium increase will be matched by tax credits so the government will pick up the difference. But for those who don’t receive tax credits – if you’re a family of 4 making about $98,000 or more a year – you’ll be the one making up the difference. Because premiums will go up so much, experts estimate that Trump’s action will force 1 million people to lose their health care.
It’s not only that premiums will go up, but many insurers may be forced to leave the Marketplace meaning that many may not have any coverage options. This is an even greater risk in rural areas who are already facing fewer options.
Keep in mind that insurers are required by law to provide consumers who qualify with lower deductibles and out-of-pocket costs. Because they would no longer receive payment for providing these discounts, other consumers would have to pick up the tab – and that’s if the insurer decides to keep offering coverage.
That’s why independent experts, business leaders, insurers and insurance commissioners have all pushed for Trump to continue making the payments. The U.S. Chamber of Commerce and the nation’s leading hospital and doctor’s organizations signed onto a letter encouraging the Administration to keep making the payments because of what it would mean for people’s premiums. State insurance commissioners – including in Maine, Pennsylvania, Tennessee, and Washington – have warned that not making the payments will mean that everyday people will pay the price. Insurers in states such as California and Pennsylvania have already announced two set of rates for next year – one for if Trump follows through on sabotage threats and the other for if he doesn’t. And, other states that have released their rates have said that they had to make their rates higher because of the uncertainty created by Trump’s threats to cancel the payments – in Colorado it means rate increases nearly 30% more for next year.
But it’s not just industry leaders, Republican members of congress are calling for bipartisan action to strengthen the individual market. Senators from Maine, North Dakota, Alaska, Tennessee, Wisconsin – and even Republican Majority Leader Mitch McConnell have recognized that it’s important to stabilize the marketplaces and that means making sure cost sharing reduction payments are made.
This decision by Trump to cancel payments will cost the government more than if they just did what was right and made the payments. Because most people receive tax credits that increase when premiums increase, Trump canceling the cost sharing reduction payments won’t actually save any money. In fact, it will cost taxpayers an additional $2.3 billion next year.
It’s no wonder that the American public has been very clear about who it will responsible for what happens next. A recent Kaiser Health tracking poll found that 64 percent of Americans, including ⅔ of independents and a majority of Republicans, will blame Republicans and President Trump for any future problems with health care and the Affordable Care Act (ACA) going forward. The same poll found that 74 percent want Trump and his Administration to do what they can to make the current law work – that includes 8 in 10 independents and over half of Republicans.
As the Wall Street Journal editorial board wrote, “Republicans run the government and that means they are responsible for what happens in health care.”
The question for Trump: Will he listen to his own party, experts and voters? Or will he ignore the facts and punish the American people?