Apparently frustrated by Congress’ inability to “repeal and replace” the Affordable Care Act, President Donald Trump this week decided to take matters into his own hands.
Late Thursday evening, the White House announced it would cease key payments to insurers. Earlier on Thursday, Trump signed an executive order aimed at giving people who buy their own insurance easier access to different types of health plans that were limited under the ACA rules set by the Obama administration.
“This is promoting health care choice and competition all across the United States,” Trump said at the signing ceremony. “This is going to be something that millions and millions of people will be signing up for, and they’re going to be very happy.”
The subsidy payments, known as “cost-sharing reductions,” are payments to insurers to reimburse them for discounts they give policyholders with incomes under 250 percent of the federal poverty line, or about $30,000 in income a year for an individual. Those discounts shield these lower-income customers from out-of-pocket expenses, such as deductibles or copayments. These subsidies have been the subject of a lawsuit that is ongoing.
The cost-sharing reductions are separate from the tax credit subsidies that help millions of people pay their premiums. Those are not affected by Trump’s decision.
Some of Trump’s actions could have an immediate effect on the enrollment for 2018 ACA coverage that starts Nov. 1. Here are five things you should know.
1. The executive order does not make any immediate changes.
Technically, Trump ordered the departments of Labor, Health and Human Services and Treasury within 60 days to “consider proposing regulations or revising guidance, to the extent permitted by law,” on several different options for expanding the types of plans individuals and small businesses could purchase. Among his suggestions to the department are broadening rules to allow more small employers and other groups to form what are known as “association health plans” and to sell low-cost, short-term insurance. There is no guarantee, however, that any of these plans will be forthcoming. In any case, the process to make them available could take months.
2. The cost-sharing reduction changes ARE immediate but might not affect the people you expect.
Cutting off payments to insurers for the out-of-pocket discounts they provide to moderate-income policyholders does not mean those people will no longer get help. The law, and insurance company contracts with the federal government, require those discounts be granted.
That means insurance companies will have to figure out how to recover the money they were promised. They could raise premiums (and many are raising them already). For the majority of people who get the separate subsidies to help pay their premiums, those increases will be borne by the federal government. Those who will be hit hardest are the roughly 7.5 million people who buy their own individual insurance but earn too much to get federal premium help.
Insurers could also simply drop out of the ACA entirely. That would affect everyone in the individual market and could leave some counties with no insurer for next year. Insurers could also sue the government, and most experts think they would eventually win.
3. This could affect your insurance choices for next year. But it’s complicated.
The impact on your plan choices and premiums for next year will vary by state and insurer. For one thing, insurers have a loophole that allows them to get out of the contracts for 2018, given the change in federal payments. So, some might decide to bail. That could leave areas with fewer — or no — insurers. The Congressional Budget Office in August estimated that stopping the payments would leave about 5 percent of people who purchase their own coverage through the ACA marketplaces with no insurers in 2018.
For everyone else, the move would result in higher premiums, the CBO said, adding an average of about 20 percent. In some states, regulators have already allowed insurers to price those increases into their 2018 rates in anticipation that the payments would be halted by the Trump administration.
But how those increases are applied varies. In California, Idaho, Louisiana, Pennsylvania and South Carolina, for example, regulators had insurers load the costs only onto one type of plan: silver-level coverage. That’s because most people who buy silver plans also get a subsidy from the federal government to help pay their premium, and those subsidies rise along with the cost of a silver plan.
Consumers getting a premium subsidy, however, won’t see much increase in their out-of-pocket payments for the coverage. Consumers without premium subsidies will bear the additional costs if they stay in a silver plan. In those states, consumers may find a better deal in a different metal-band of insurance, including higher-level gold plans. Many states, however, allowed insurers to spread the expected increase across all levels of plans.
4. Congress could act.
Bipartisan negotiations have been renewed between Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) to create legislation that would continue the cost-sharing subsidies and give states more flexibility to develop and sell less generous health care plans than those currently offered on the exchanges. Trump’s move to end the cost-sharing subsidies may bolster those discussions.
In a statement, Murray called Trump’s action to withdraw cost-sharing subsidies “reckless” but said she continues “to be optimistic about our negotiations and believe we can reach a deal quickly — and I urge Republican leaders in Congress to do the right thing for families this time by supporting our work.”
Trump on Friday urged Democrats to work with him to “make a deal” on health care. “Now, if the Democrats were smart, what they’d do is come and negotiate something where people could really get the kind of healthcare that they deserve, being citizens of our great country,” he said Friday afternoon.
Earlier Friday, Senate Minority Leader Chuck Schumer (D-N.Y.) did not sound as if he was in the mood to cut a deal.
“Republicans have been doing everything they can for the last ten months to inject instability into our health care system and to force collapse through sabotage,” he said in a statement. “Republicans in the House and Senate now own the health care system in this country from top to bottom, and their destructive actions, and the actions of the president, are going to fall on their backs. The American people see it, and they know full well which party is doing it.”
A poll released Friday by the Kaiser Family Foundation shows that 71 percent of the public said they preferred that the Trump administration try to make the law work rather than to hasten replacement by encouraging its failure. The poll was conducted before Trump made his announcement about the subsidies. (Kaiser Health News is an editorially independent program of the foundation.)
5. Some states are suing, but the outcome is hard to guess.
Even though all states regulate their own insurance markets, states have limited options for dealing with Trump’s latest move. Eighteen states and the District of Columbia, led by New York and California, are suing the Trump administration to defend the cost-sharing subsidies. But it is unclear whether a federal court could say that the Trump administration is obligated to continue making the payments while that case is pending.
–Julie Rovner, Mary Agnes Carey and Julie Appleby, Kaiser Health News
Congress has to mandate the spending of money not POTUS. Make them do their job
The headline could have been cut short, “Trump Blows”.
The average person won’t care, but the lawsuit challenging the subsidy involves budgetary power. The Constitution reserves appropriation power for Congress, and the President is supposed to get its approval for spending. Obama’s executive order, which placates the insurance companies, did an end-run around this requirement. Eventually the public will get fed up with this arguing, and suing, and will demand that Congress enact Medicare-for-all, along with the taxes required to support it. The lower middle class deserves medical care, just as we now provide it to the poor.
Jay Bonner says
Thank you President Donald J Trump for doing Congress’s job by dismantling Obamacare.
a tiny manatee says
Eagerly looking forward to all of those boomer medication prices skyrocketing from an out of pocket standpoint.
Chris A Pickett says
All I need to know is that while I am paying for my insurance MYSELF completely, my tax money won’t be funding those who want to “pursue their dreams” and NOT work and then I have to help pay for THEIR health insurance. What is next Those who work have to pay for LAZY peoples car insurance who want to “pursue their dreams” Guess what idjits, pursuing your dreams costs money, so get a J. O. B.!
Stop using the word “insurance” when you talk about this kind of stuff.. It’s not insurance if companies are required to provide all individuals with certain kinds of coverage. Be consistent and honest in what you call it. You want another form of welfare to be paid by all for those who can’t afford it.
Edith Campins says
So basically he is dismantling the ACA without a concrete plan to replace it. For such a “great deal maker”
he can seem to negotiate himself out of a paper bag.
Where is the wonderful plan he claimed he had? The one that was going to cover everybody and cost less?
Where is the deal he was going to make with the drug companies to lower medication prices?
As for Mr. Pickett’s comments…when people don’t have insurance they go to the emergency room and taxpayers end up paying anyway.
tim thoms says
trump is an idiot!!
Diana L. says
This can no longer be called the ACA or Obamacare. It should have been re named GOPCare when they didn’t expand Medicaid in all the states and again when Rubio restricted the risk corridors. Congress has been sabotaging this bill since inception. In return, they have sabotaged the American people.
The ACA was not perfect but any of the huge failures did not come from the ACA, as written.
I don’t know when the American public will speak up and demand that Congress stop hurting us for petty-political gain?
It is now to be called TrumpCare.
I don’t disagree, but really, TrumpDon’tCare is the truth. His malignant reign reminds me of this all the time:
“Blessed Event,” W. H. Auden; a poem for the season.
Round the three actors in any event
Is always standing an invisible audience of four,
The double twins, the fallen natures of man.
On the Left they remember difficult childhoods,
On the Right they have forgotten why they were so happy,
Above sit the best decisive people,
Below they must kneel all day so as not to be governed.
Four voices just audible in the hush of any Christmas:
Accept my friendship or die.
I shall keep order and not very much will happen.
Bring me luck and of course I’ll support you.
I smell blood and an era of prominent madmen.
But the three hear nothing and are blind even to the landscape
With its towns and rivers and pretty pieces of nonsense.
He, All Father, repenting their animal nights,
Cries: Why did She have to be tortured?
Once more a virgin, She whispers: The future shall never suffer.
And the new life awkwardly touches its home, beginning to fumble
About it the Truth for the most successful way
Which will always appear to end in some dreadful defeat.
Jay, guess neither you or your family have seen terminal illness in the face. Wonder if you would still be dancing when it strikes or it won’t matter as you have some way of funding it anyway.
This is what happens when you elect a clueless – dotard – moron !!!
Good another one of Obama’s illegal disasters being dismantled. Keep up the good work Mr Trump🇺🇸
Just Sayin says
The same people defending the insurance company today hated them a few years ago because of profits. You should be happy the insurance companies will be losing money, look how stock fell just Friday. Liberals should be dancing with joy.
The ones that worry about obamacare don’t even use it,figure it out! What a joke.
Thank you Mr. President for finally getting rid of Obamacare. Most Americans did not want it and were forced into it. Also the millions upon millions of Americans who lost the insurance they had because of the heartless Obama can rest a little easier now. Obamacare was a plan doomed to fail and every democrat knew it and didn’t care. BYE BYE OBAMACARE. THANK YOU DONALD TRUMP FOR LISTENING TO WHAT AMERICANS WANT. TRUMP 2020🎉🎉
To Just Sayin,,,You should not be pleased if insurance companies profits drop because they will just raise EVERYBODY’s health insurance rates to compensate.
There goes your insurance rates. The premiums are going to skyrocket and you have no one to blame but yourselves for being so foolish as to believe Trump was going to do something good for the nation.
We were “promised” by trump that EVERYONE would have better health insurance coverage and lower rates with trump(doesn’t)care. Let’s see what happens.
@Ws “you” most certainly do not speak for me, or any “intelligent, educated, caring” American!
There are still a few “TRUMP IS THE GREATEST PRESIDENT EVER!” holdouts, but by and large they have gone away. I remember when Trump was first elected every post on flagler live was, “YOU LOST, DEAL WITH IT, GO FIND A SAFE SPACE LIBERAL SNOWFLAKE!” I find it interesting how few and far between they are now. It’s also amazing how blindly they follow his lies and false promises.
A wall hasn’t been built, Mexico didn’t pay for it.
He hasn’t repealed Obamacare and doesn’t have any plan to save Americans money while providing quality healthcare.
“Everybody is getting a tax cut, especially the middle class.” Nope, only take cuts for the MOST wealthy.
He hasn’t rebuilt the country’s infrastructure.
He hasn’t saved medicare, medicaid or social security in any way shape or form, he has however, made cuts to it.
“I will take care of women.” He has done literally the opposite by stomping on women’s rights and attempting to cripple laws that protect them.
“I would not be a president who took vacations. I would not be a president that takes time off.” Does a 17 day golfing tour count as a vacation?
He didn’t prosecute Hillary Clinton, because she didn’t do anything illegal, because there isn’t any evidence to support that. Using actual fake news buzzwords and phrases like “KILLARY,” and “LOCK HER UP,” doesn’t equal guilt.
He didn’t “Drain the swamp,” he filled it will cronies.
He still hasn’t defeated ISIS.
Enjoy your empty promises!
The most interesting part of the sabotaging of the ACA is, that those who stand to lose the most, are the areas that voted for the grand dotard #45, if that ain’t schadenfreude I don’t know what is, just another case of GOPers eating their own.