President Trump has renewed his threat to yank critical Obamacare reimbursements from health insurers but experts said it’s likely an empty gesture, insisting that if he does cut off the payments it would leave the markets even wobblier — and the GOP would get the blame.
Mr. Trump’s threat appears to be designed to intimidate Democrats into joining Obamacare repeal negotiations, with the White House saying that the president retains a number of options for unilateral action to eviscerate his predecessor’s signature health overhaul.
Health and Human Services Secretary Tom Price has said he hasn’t ruled out the idea of granting a waiver from the individual mandate requiring everyone to have insurance.
And Mr. Trump himself seems focused on yanking cost-sharing reductions, or “CSRs,” that reimburse insurers for picking up low-income customers’ costs on Obamacare’s exchanges.
Democrats are insistent that those payments continue, even though Congress has never approved them. President Obama paid them anyway, and lost a court battle in which a judge ruled the payments illegal.
Mr. Trump has continued paying them as the case plays out, but in recent days has once again signaled restlessness.
“As I said from the beginning, let ObamaCare implode, then deal. Watch!” Mr. Trump tweeted Thursday after the wee-hours failure of the Senate GOP’s bid to repeal and replace the 2010 Affordable Care Act.
But it is unclear when, or even if, Obamacare would “implode” if Mr. Trump were to end the payments.
Insurers are required to cover customers’ costs even if they’re never reimbursed by the government, so they would likely raise their rates to make up for lost funding.
“Funding to lower consumers’ cost-sharing is passed through the health plans — health plans do not profit from that funding,” said Kristine Grow, spokeswoman for America’s Health Insurance Plans, a lobbying group for insurers. “If that funding goes away, premiums for everyone who buys their own coverage will go up by about 20 percent.”
Obamacare’s premiums subsidies rise with rates, so many customers will be cushioned from the blow. More than 7 million people buy insurance on their own, but earn too much money to qualify for taxpayer-funded assistance, so they would feel the full brunt of premium increases.
“Ironically, these people, higher-income people, tend to more often vote Republican. So, by following though on his threat, Trump really only hurts his people,” said Robert Laszewski, a health policy consultant in Alexandria, Virginia.
Taxpayers would feel the pain, too, by paying out an estimated $2.3 billion more — in net — to fund rising premium subsidies even after the savings from axing cost-sharing payments is subtracted out, according to the nonpartisan Kaiser Family Foundation.
Democrats who’ve suffered politically for faults in their signature health law say they’ll make sure Mr. Trump pays a political price if he pulls the trigger, sowing uncertainty in the markets.
“If he does, ‘You break it, you own it,’” said Sen. Bill Nelson, Florida Democrat who spearheaded bipartisan talks among 10 senators how to bolster ailing Obamacare markets.
After the Senate GOP’s stunning failure last week, all sides are trying to figure out the next steps.
A bipartisan House group known as the Problem Solvers Caucus released a multipronged plan Monday that would fund the payments, add more money to stabilize the markets, loosen Obamacare’s mandate requiring large employers to provide insurance and repeal Obamacare’s tax on medical device sales — a levy that’s taken fire from both parties.
It would also let states to “experiment” with new ways to cover people.
But plans to fund the cost-sharing payments are drawing fire from conservatives. “I think many people view this as a bailout,” said Rep. Jim Jordan, Ohio Republican.
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