YES MR. PRESIDENT: HEALTH CARE IS COMPLICATED!

…If the health care issue isn’t fixed, the poor will again be getting their very expensive health care here

 

If the poor lose access to health care, it will cost the government billions on health insurance

 

For someone that was elected by the average working American, this new president has figured out how to spend more government money while sticking it to our poor Americans.

 

As a Washington Post opinion writer sarcastically put it, “Who says President Trump isn't a government policy genius?”

 

The latest version of the US House of Representative’s plan to repeal and replace the ACA, that’s exactly what the new plan would do to America’s poor.

 

The ACA or “Obamacare” plans are currently offered in different "precious metal" levels, which refer to the share of total health costs plans are expected to cover ("bronze" plans cover 60% on average, "silver" 70%, "gold" 80%, "platinum" 90%). The law says that to participate in the marketplaces, insurers have to offer lower-income people a special deal: They can buy silver-level plans, but still get closer to gold- or platinum-level coverage.

About half of those enrolled in the exchanges benefit from these subsidies, and their savings can be huge. For those making below 150% of the poverty line, combined medical and prescription drug deductibles are reduced by $3,354 on average, this is according to a Kaiser Family Foundation study.  Every month, the government reimburses insurers for the costs required to offer this more generous coverage for poor people. But the Trump administration has lately been less than clear about how long this will continue.  The administration had said it would continue the payments for the time being. But then a tweet from Trump suggested the end might be forthcoming.  (Ah, those wonderful Tweets!)

 

If in fact the subsidies disappear, or if their funding just remains in doubt for long enough to cause insurers to panic, both the liberals and the fiscal conservatives should all start worrying. That's because poor people would lose access to health care; and the government would have to spend even larger piles of money on health insurance.

 

If the government reimbursements went away, the insurers would still be required by law to continue guaranteeing poor people reduced out-of-pocket spending. Where would they get the money for that? Mostly likely by raising premiums on these same plans by about 20%.  This is also according to the Kaiser Family Foundation.

 

And that's where things really go crazy, and it’s where the structure of Obamacare creates a domino effect that costs the government billions more.  That’s because the other kind of subsidy offered to poor and middle-income people on the Obamacare exchanges is “tax credits on the premiums”.

 

The amount of this credit happens to be pegged to specific plan premiums. If premium prices increase for the benchmark “Silver plan”, then the size of tax credits for everyone eligible for tax credits also increases.  The final result is, the government would be hit for about $12.3 billion in additional premium tax credits.  That would outweighing the $10 billion it would save by killing out-of-pocket-spending subsidies.

 

Now there is one other option.  The other way insurers might deal with the elimination of the cost-sharing reduction payments is just to leave the marketplaces altogether.  Both Anthem and Molina insurers have already threatened to do so.

 

This would create general chaos which would likely result in sharp premium hikes.  And this would of course, result in more hardship and less insurance coverage for poor and middle-class Americans. The very broad and bipartisan alliance of insurers, health providers, anti-poverty advocates, even the Chamber of Commerce, the National Governors Association and state insurance commissioners have all argued for the subsidies to stay.

If you will also recall, Trump himself has argued for them to stay. 

 

But with the Obamacare repeal-and-replace plan still in limbo, now some conservative House Republicans are calling for these subsidies to continue.

 

The point is that the insurers only have a few more weeks to decide whether to stick around for the 2018 health care exchanges, and at what price they would stay.

 

The reality is that if Trump doesn't commit to these subsidies by then, the market will most likely go into a full-fledged meltdown, and President Trump would be to blame.  But we know he would just throw the blame on everyone else.  "The Donald" never accepts blame for anything!

 

To put this all in the prospective of the president’s own words:  “Hey, who knew that health care was so complicated?”

Actually Mr. President, everyone but you did.

 

Copyright G.Ater  2017