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.
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.
The Limbaugh Health Care Reform Plan
Because I don’t think it really has anything to do with health care. I think it’s just the redistribution of wealth, the power.
.. Well, what do you think liberalism is, in part? About making these people feel good about the messes that they’ve made, all because they care and they have great compassion. And they’re great at using other people’s money, which is what Medicaid and Medicare are, to take care of people and keep ’em away from you. If put everyone on Medicaid and Medicare then you can assume they’re gonna have health care, problem solved. You don’t have to hear them complain anymore, you don’t see ’em, you don’t run into ’em.
.. it seems simple to fix this. Just use a little common sense, trust the free market, get the players that have made the mess out of the way
.. Trump is probably finding out just how deeply intertwined the tentacles of this are throughout our society.
.. And what happens when you remove one tentacle? Yeah. And then you find six more pop up that you didn’t know were there. That nobody knew were there, is how deeply embedded some of this stuff is.
.. Providing health care for people with preexisting conditions is the equivalent of selling somebody a homeowner’s policy for a hundred dollars while the fire is burning their house down. It just doesn’t happen, yet in health care we’re doing it. And it screws up all of the actuarials. It screws up all the calculations, it screws up all the numbers, it screws everything up.
.. I’m just saying that once you include people with preexisting conditions in the pool with everybody else and then you go get premiums based on that, it’s not gonna work. You just can’t do it because you’re not talking insurance on preexisting conditions; you’re talking welfare. And nobody in Washington has the guts to eliminate coverage for preexisting conditions.
.. I have no desire to run anybody else’s life. I don’t care whether somebody can run theirs or not; that’s their responsibility and their problem.
.. I do not live under any illusions that I should tell everybody how to live.
.. My health care reform plan is real simple. For everybody who can, and we would have to have a very, very honest assessment of that, you buy your own. You can either get it from your employer as part of your deal there, or you don’t and you go out and make your own deal. You’ll be able to make your own deal because the government’s not involved and there are insurance companies all over this country selling health insurance, and they’re competing with one another
.. “But Mr. Limbaugh, Mr. Limbaugh, what about the people that can’t afford it?”
.. Well, what’s made it different today than the way it was then? And I would argue it’s a bunch of people dipping their hands in it and being involved in it who are not in the business. Trying to buy votes with it, trying to insure and secure power with it and trying to basically tell people, “You know what? You don’t have to be responsible. We’ll do that for you. Just vote for us.”
.. if it’s this bad, how in the world can the people in charge of it not know it’s this bad? If it is this bad, then why do the Republicans want to hand power back to the Democrats? Why do the Republicans want to hurt Trump’s base?
.. this bill makes it illegal to check an enrollee’s immigration status. You ask why would they do that? Well, well, we’re talking about the open borders crowd. We’re talking about a party that’s been telling us for the last 10 years they don’t think they will ever become a political majority without paying homage to Hispanics.
.. They’ll hire actors to portray these old people and indigents who’ve been left behind. That’s just what they do.
.. to compare subsidies and tax credits is purposefully misleading, and you can’t compare the value. They each have different political values and so forth, but tax credits end up — that’s money you get a credit for on your tax, you don’t pay as much, so that leaves you with more money to spend theoretically shopping for a better deal on health care. Subsidies just help you pay for something. You never see the subsidy, somebody else writes the check or sends the money or what have you.
.. one of the new CEOs, it was either General Motors or Ford took over and after about six weeks this guy said, “I thought I was getting in the business to make and sell cars. I didn’t know I was getting into the health care business.”
Because his job, the number one cost at his automobile manufacturing company was health care for his employees.
.. make it single payer, where nobody worries about cost except they theoretically do as they ration and deny certain people, but in reality they don’
.. If employers are going to be given tax credits for the health insurance they buy for their employees, why shouldn’t individuals get it? Why shouldn’t it become a deductible item?
.. Tax credits end up you having a little bit more money in your back pocket, which, if we’re gonna start applying degrees of conservatism, that’s a pretty conservative thing to do, have a policy where people get to keep more of their money in this.
.. So how can the Democrats complain about tax credits for the self-employed? Poets, painters, and that’s who Pelosi talked about. Free from job lock so you can become a poet, so you could become a painter.
.. Job lock, as though everybody was locked in a job they didn’t want because they needed the health care. So Obamacare was gonna come along and free you from all that.
.. people like Obama, Hillary, they love subsidies because it makes you dependent. You never see the money.
Why It Matters How We Define ‘Insurance’
Some types of insurance charge people according to risk. Others don’t. On health care, Americans are caught between the two, Greg Ip writes
Republicans want to strip out the regulations in Obamacare that require some people—primarily the young, male and healthy–to pay more so that others–mostly the elderly, female and sick–pay less. Critics say Republicans don’t seem to understand that insurance means some people subsidize others.
.. Pure insurance covers only random perils. Predictable perils generally require higher premiums. Teenagers and people with speeding tickets have more accidents, so insurers charge them more. If they were forced to charge risky and safe drivers the same amount, the latter would then be subsidizing the former.
.. Social Security, for example, effectively requires younger, affluent, able-bodied workers and two-earner couples to subsidize older, less affluent and disabled workers and one-earner couples.
.. pre-Obamacare health insurance was more like car insurance. Insurers could charge more to those they expected to cost more: women, the elderly, those with pre-existing conditions, with the result that many of these people went without insurance.
.. Conservative Obamacare opponents fall into two camps.
- One opposes the principle of subsidies, either direct or indirect via regulations and mandates, and are relatively indifferent to swelling the ranks of the uninsured.
- The other wants to reduce the uninsured, but without distorting the structure of the private market that forces some people to overpay so that others can underpay.
.. This second group would scrap many of Obamacare’s underwriting restrictions, which would stabilize the market by allowing insurers to charge premiums commensurate with risk. Those who couldn’t afford coverage because of gender, age or other risk factors would receive refundable tax credits.
.. age explains 75% of the variation in health risks
.. insurers could still be prohibited from excluding pre-existing conditions for members or charging women more than men. So long as they could underwrite based on age, and so long as patients maintained continuous coverage (rather than buying it only when they got sick), insurers could still price coverage profitably.
.. a 60-year-old
.. premiums for such a person are typically $13,000
.. boost that subsidy to $10,900
.. “The revenue/subsidies required to make it work are massive—because they have to substitute for all the complex cross-subsidies,”