Former Health Connector Head On Trump's Ending Of ACA Subsidies

Cheryl Sanders
October 17, 2017

The White House announced on Thursday that it was stopping subsidies that were provided by the federal government to help provide medical insurance for low income Americans.

On Friday, President Trump signed an executive order to stop subsidy payments to insurers under the Affordable Care Act. Nonetheless, Trump has opened the door to an honest discussion of the costs of the Affordable Care Act, both in tax dollars and in high premiums.

Republicans call Obamacare, which extended health insurance to 20 million people, a government intrusion into Americans' healthcare, and have been promising for seven years to scrap it.

Here's where it gets complicated: Those standard plans are also the benchmark the federal government uses to calculate the second Obamacare subsidy that reduces monthly premiums for consumers earning up to four times the federal poverty level. Those discounts shield these lower-income customers from out-of-pocket expenses, such as deductibles or copayments. It's true that only Congress can appropriate funds, which is why there's an ongoing lawsuit about this.

In August, the Congressional Budget Office found that killing the cost-sharing subsidies alone would increase the federal deficit, on net, by $194 billion from 2017 through 2026. So the pain of Trump's decision will be felt by the U.S. Treasury.

Some of Trump's actions could have an immediate effect on the enrollment for 2018 ACA coverage that starts November 1. Here's what you need to know about his action. Obamacare changed these rules by treating association health plans as small businesses and requiring them to cover all the mandated benefits. There is no guarantee, however, that any of these plans will be forthcoming.

That means insurance companies will have to figure out how to recover the money they were promised. There's no way to raise premiums now for a few months to try to recoup any of that.

But remember, many Americans already face double digit increases in Obamacare premiums this year. A 2013 IRS Notice prevented employers from using HRA dollars to fund employees' individual health insurance premiums-because the Obama Administration anxious that doing so would encourage employers to drop coverage.

Insurers could also simply drop out of the ACA entirely. The ACA marketplace was riddled with bare counties at one point. And the insurers that serve them will wind up charging even higher premiums to cover the higher cost per enrollee. Insurance regulators in Arkansas, another state that went for Trump, approved premium increases on Friday ranging from 14 percent to almost 25 percent for plans offered through the insurance marketplace.

Some insurers may decide to bail out of markets altogether. That could leave areas with fewer - or no - insurers. The Trump Administration regulations will likely modify, or eliminate entirely, those restrictions, allowing people to purchase plans not compliant with the Obamacare mandates.

But how those increases are applied varies.

More than 6 million people benefit from the cost subsidies, including about 150,000 in New Jersey, officials said.

Give individuals more options, and more affordable options. Consumers without premium subsidies will bear the additional costs if they stay in a silver plan.

Any new effort to fix Obamacare should be bipartisan. "And I guarantee you one thing, it's not Donald Trump". "This will be great health care".

Earlier Friday, Senate Minority Leader Chuck Schumer, D-N.Y., did not sound as if he was in the mood to cut a deal.

Of course, Trump claims that he's merely making the health-care system better. "We, the Republican Party, will own this".

It depends on where they live, said Larry Levitt of the nonpartisan Kaiser Family Foundation. The poll was conducted before Trump made his announcement about the subsidies.

In some states, regulators directed insurance companies to limit potential rate increases only to plans sold on the ACA markets.

Prior to Thursday's late news, Trump had begrudgingly paid insurers for subsidies month-to-month, putting insurers and the public more broadly on edge.

Trump's timing could now produce disastrous results, say health experts.

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