Continuing uncertainty will force more cautious strategies, insurers say, such as bigger rate increases, or pullbacks or withdrawals, because they can no longer stomach the risk. Insurers say they were whipsawed by the Trump administration’s moves last week, when President Trump threatened to stop funding the ACA’s cost-sharing reduction subsidies in an effort to prod Democrats to negotiate over a health bill.
Trump’s Renewed Focus on Health Bill Vexes GOP Tax Overhaul Strategy
Mr. Trump signaled last week that one of the reasons he has reprioritized health care is that he was relying on savings from the health bill to bolster the tax plan.
.. If the health plan is signed, “we get hundreds of millions of dollars in savings that goes into the taxes,”
- .. an additional 3.8% tax on high-income households’ investment income,
- an extra 0.9% tax on top earners’ wages and
- various taxes related to health-care, such as medical devices.
.. repealing those taxes and offsetting the effect on budget deficits by cutting Medicaid, the health program for the poor.
.. lower projected federal revenue by about $1 trillion over a decade.
.. Republicans on Capitol Hill worry that they may not be able to adopt a 2018 budget resolution because of intraparty disagreements on spending.
Paul Ryan Failed Because His Bill Was a Dumpster Fire
It was bad policy, not poor tactics or negotiating skills, that doomed the GOP’s efforts to repeal and replace Obamacare.
he and his allies crafted a poorly constructed and radical bill that would sharply cut support to low-income Americans and those with serious health conditions, while enacting big tax cuts for the wealthy.
.. Speaker Ryan’s crafting of AHCA was a slapdash enterprise.
.. even leading health-care experts were confused by the changes. As Timothy Jost noted at Health Affairs: “This comprehensive a repeal of the ACA would have far-ranging consequences for our health care system that can scarcely be described, much less understood, in the hours that remain before a vote.”
.. wondered whether the game plan was just for the House to pass something—anything—and then let the Senate do the real work.
.. So why did Republicans fail? In a word: insincerity.
.. they might have refined another conservative model, such as Avik Roy’s modifications to ACA exchanges, to turn ACA’s exchanges in a more conservative direction.
.. Secure in the knowledge that they would face President Obama’s veto, Republicans rammed through a succession of extreme repeal-and-replace bills that resembled AHCA’s original draft. These bills excited the Republican base, but would have horrified most other Americans if they ever found sufficient reason to look.
.. Congressional Republicans suffered what George W. Bush might call a “catastrophic success” with Donald Trump’s unexpected victory.
.. leaving people in plans where the “deductibles are so high that it’s really not worth much to them.”
.. He vowed to replace the “failing,” “horrific” Obamacare with “something terrific.”
.. Republican plans are designed around higher deductibles and narrower benefits, not to mention more limited Medicaid.
.. smaller financial subsidies for people with chronic health conditions. That was the clear intention, but Ryan refused to admit it.
.. Many in the GOP, above all President Trump, seemed strangely uninterested in the policy details.
.. To the extent Republicans did have an animating passion, it was to puncture President Obama’s legacy—and to avoid looking foolish by failing to honor their “repeal and replace” rhetoric.
.. For all their endless warnings about how Obama’s signature health law was hurting American families, driving up costs and putting us on the path toward socialism, it turns out they didn’t care enough to put in the work.
Explaining the Health Payments That Trump Is Threatening to End
The government provides a subsidy to help buy a policy, but about seven million people also get help with their out-of-pocket costs when they go to the doctor or fill a prescription. The government pays the insurance companies extra — $7 billion last year — to offer plans with discounts on the usual deductibles and co-payments that might make medical care unaffordable for relatively poor consumers.
.. There is no language in the bill explicitly linking the subsidies to a permanent funding source, but the Obama administration argued that Congress intended for the money to be paid alongside other subsidies, and the subsidies have been paid over the last three years.
House Republicans said what the Obama administration was doing was unconstitutional, and they brought a lawsuit to stop the payments.
.. Killing the cost-sharing subsidies would be a huge and immediate hit to insurance companies offering Obamacare plans. The companies are still required by law to offer their customers discounts, but they could lose the money to help fund them. Without the government payment, they would need to find another way to make up the difference.
.. Insurers could raise the price of insurance for everyone
.. estimated premiums for a plan would go up by an average of 19 percent without the funding
.. A decision to do away with the subsidies would also send a key signal to the insurance companies that the Trump administration and Congress have decided not to stabilize the market, which has been particularly shaky in some areas. Without the subsidies, insurance could get very expensive in some places in the country. In other areas, no insurance options might be available.
.. encourage Republicans in Congress to pass an appropriations bill that explicitly funds the subsidies
.. A broad coalition of insurance companies, hospitals, doctors and patient groups want the subsidies to be paid. Democrats in Congress are also strong supporters of the cost-sharing reductions. A letter to the White House this week urging a resolution of the issue was signed by insurers, hospitals, doctors and even the solidly Republican Chamber of Commerce.
.. that does not mean that all Republicans in Congress want to see Obamacare markets in their home state fail. In fact, several key Republicans in Congress, including Greg Walden of Oregon, the chairman of the House Energy and Commerce Committee, have said that they would prefer Congress to pass legislation explicitly funding the subsidies.
.. some people in the Trump White House believe that preserving the risk of market failures could create political pressure for a deal on a larger Obamacare replacement bill.