Trump’s prediction of a “death spiral” in the Affordable Care Act may be a self-fulfilling prophesy, as his administration adds uncertainty about the future of health-care subsidies at a critical moment.
AS President Donald Trump yodels about the Obamacare “death spiral,” he may be getting his wish. The vast and expanding pool of uncertainty about the Affordable Care Act threatens to be a lead weight on its viability, producing rising rates and decreasing options for millions of low-income Americans.
The latest blow to rational health care policy came when the Trump administration asked for a second deadline extension to respond to a lawsuit filed by the GOP-led House which challenges subsidies for low-income Americans buying health insurance on Obamacare exchanges. The administration now is not due to respond to the lawsuit until well into the summer.
That puts the future of those subsides — critical for the viability of the health-care exchanges — in doubt at the very moment insurers are setting rates for 2018. In Washington, those rates are due by early June.
The Kaiser Family Foundation estimated the subsidies targeted by the lawsuit lowered health care deductibles by as much as $3,354 and cut annual out-of-pocket costs by as much as $5,587. That’s big money for the 7.1 million low-income Americans who got Obamacare subsidies on the individual market last year.
Now, with Republicans in the House enthusiastically sawing the legs off Obamacare but Senate Republicans balking at a quick replacement, insurers are rightly skittish about the future of the cost-sharing subsidies. And a nervous insurance market means higher costs.
Kaiser estimates that without the subsidies, the cost of a midlevel plan on the exchanges will increase by 21 percent in states that did not expand Medicaid (ironically, they almost all voted for Trump). In states that expanded Medicaid, including Washington, rates for that type of plan would rise 15 percent.
Uncertainty about the subsidies “is the single most destabilizing factor in the individual market, and millions of Americans could soon feel the impact of fewer choices, higher costs, and reduced access to care,” a spokeswoman for America’s Health Insurance Plans, a lobbying group for insurers, told Bloomberg.
Washington’s health-care exchange has functioned better than most, but this year at least one insurer on the individual marketplace — Community Health Plan of Washington — has already announced it will not offer a plan. The insurer will continue to provide coverage for existing plans through 2017, and remain an insurer for Medicaid plans. But the loss reduces consumers’ options.
Washington’s insurance commissioner has not heard of other plans pulling out, but spokeswoman Stephanie Marquis said “the noise is making them incredibly nervous. … If things get worse, they could say nevermind for the whole market or for certain counties.”
Obamacare needed tweaks to ensure more options and to lower costs. But Trump’s apparent self-fulfilling prophesy of the Obamacare “death spiral” is nihilistic, especially when the House GOP alternative would cut insurance for 23 million Americans.
If you see a huge bump in your premiums for 2018, call it what it is: the uncertainty of Trumpcare.