Opinion: The real fallout from Trump ending these health subsidies

This group might be reconvened to talk about health reform after the president’s latest move. (AP Photo / Evan Vucci)

It’s an odd spectacle to see Democrats attacking a proper implementation of Obamacare that is projected to reduce health costs for many consumers and soon lead more people to have insurance. But that’s what’s happening after the Trump administration’s decision to stop paying for so-called cost-sharing reductions (CSRs).

Headline writers are describing the move as if it will hurt the poor, because the CSRs are intended to offset out-of-pocket costs such as deductibles and co-pays for low-income Americans buying health insurance on the individual market. But an analysis by the Congressional Budget Office back in August forecast the opposite: “Most people,” according to the agency, “would pay net premiums (after accounting for premium tax credits) for non-group insurance throughout the next decade that were similar to or less than what they would pay otherwise—although the share of people facing slight increases would be higher during the next two years.”

The key phrase there is “after accounting for premium tax credits.” That’s because the practical effect for lower-income Americans — whose share of premium costs are fixed by Obamacare — will not be that their costs go up. Rather, they will instead get the money as subsidies toward premiums. Those premiums will rise, as insurers are forced to cover more costs for those customers without the benefit of CSR subsidies; but for those earning less than 200 percent of the federal poverty level, the premium subsides will offset the higher prices. In fact, CBO’s analysis suggests people in that income range might end up with better plans than before.

Many of those earning 200-400 percent of the federal poverty level, CBO said, could see lower net premiums because the tax credits will rise by a larger amount than the CSR subsidies would have lowered their other costs. As a result, CBO concluded, “The number of people uninsured would be slightly higher in 2018 but slightly lower starting in 2020.” While the agency has come to questionable conclusions about how the individual mandate will affect coverage, it has been more accurate about the number of people who will buy plans if tax dollars are subsidizing them.

Now, does this mean the new arrangement will be better or more sustainable? Not at all. Because the premium tax credits will rise by more than double the amount of the CSR subsidies (in the aggregate), federal deficits are projected to rise. And while about five in six people buying plans on the Obamacare exchanges have their premiums subsidized, the rest don’t — and they’ll be facing much higher premiums without any subsidies to offset them. On the whole, Obamacare is still in lousy shape.

But here’s the thing: The CSR subsidies shouldn’t have been paid in the past anyway, because Congress didn’t appropriate the money. It’s yet another example of how the Obama administration flouted the law, the separation of powers, etc. to make its mess of a health law function. It’s one of many problems with trying not only to make policy but to pay for policy through constitutionally dodgy means.

The law is going to function even worse now — although, as I’ve previously explained, the death spiral of higher premiums was going to happen even if the CSR subsidies were continued. Maybe Congress will decide to start funding the subsidies. Or maybe it’ll be the spark reluctant Republicans (or Democrats) need to get serious about fixing the problem. The key to finding a solution just might involve being forced to view the problem in every bit of its ugliness.

Reader Comments 0

305 comments
Robert1959
Robert1959

"The real fallout from Trump ending these health subsidies "

Over 70% of Trump's base live in states that will be affected by the "cuts" to the Affordable Care Act (ACA).  Trump owns "trumpcare". I hope GOP Governor Nathan "Lets Make A" Deal has a plan for the 850,000 Georgians who don’t have insurance at all or access to the Medicaid expansion.     

breckenridge
breckenridge

October 15 -  There was a pretty striking finding in Thursday's Quinnipac University: Fully 46 percent of Republicans — a plurality — said they would support a preemptive strike against North Korea.

===========================================


"War is mankind's most tragic and stupid folly; to seek or advise its deliberate provocation is a black crime against all men. Though you follow the trade of the warrior, you do so in the spirit of Washington -- not of Genghis Khan. For Americans, only threat to our way of life justifies resort to conflict." General Dwight D. Eisenhower, 6-3-1947

breckenridge
breckenridge

 The Real Fallout From Trump Being A Perv


October 15 - Lawyers for one of the women who have accused Donald Trump of sexual assault subpoenaed his campaign for all documents relating to her, all communications with or about her and "all documents concerning any woman who asserted that Donald J. Trump touched her inappropriately."

bu22
bu22

@breckenridge  If she isn't suing, its just a publicity stunt by the lawyer.  And since it happened in 2007, she almost certainly can't sue because of the statute of limitations.  Just a loud mouthed lawyer who doesn't have enough business trying to get his 15 minutes of fame.

SGTGrit
SGTGrit

The big lie that the left uses to shame the public yet actually insults the American public is that this country leaves its sick people to suffer and die. The belief that the federal government in complete control of our healthcare is the sole mechanism to save the sick and the poor is even a bigger lie. The fact is that the sick do not need to die because of being unable to obtain adequate healthcare. The states and local communities do far more than a federal government bureaucracy could ever do in caring for the sick and poor in our country. 

Starik
Starik

@SGTGrit  Not enough. That's particularly so in Southern states that don't care about the poor. 

Starik
Starik

@SGTGrit @Starik  Oh yes I do. If you believe they do care, you're intentionally ignoring our history and current affairs. Did Georgia expand Medicaid? 

SGTGrit
SGTGrit

@Starik @SGTGrit 

No I'm not ignoring history at all but you must be. As for the expansion of Medicaid that is for the poor not for able people who work but aren't responsibly handling their financial priorities like the welfare of their children.

SGTGrit
SGTGrit

@Starik @SGTGrit 

Starik, you're pushing the exaggeration button up to the top. Counties across the nation have safeguards in place to care for sick people who're indigent. Do some fall through the cracks? Of course but no where near the number that would fall through the cracks if dependent only on the federal central government. I think you're smart enough to really understand that.

Starik
Starik

@SGTGrit @Starik  No. 159 counties in Georgia. Only the US government has the resources to do it right. 

waitaminute3210
waitaminute3210

@Starik  So you believe the old adage, "We're from the federal government and we're here to help you."  ??



waitaminute3210
waitaminute3210

@Starik Nope. I actually vote who I think will be the best for the U.S. I voted for Obama for his first term. Saw that was a mistake and he didn't get my vote the second time around. 

chill30313
chill30313

@SGTGrit @Starik As long as the Insurance Commissioner in THIS State is in bed with the insurance companies he is supposed to be a watch dog over, then YES Southern States do not care about the working poor. Republicans just see them as easy votes.

MarkVV
MarkVV

“We can't afford a single payer healthcare system” = we cannot treat all the sick and injured people.

Who do we leave out? Who do we let suffer or die?

Starik
Starik

@MarkVV  Poor blacks for a start. It's part of the Southern Way of Life. 

waitaminute3210
waitaminute3210

@Starik  You're better than that response. Medicare covers the elderly and disabled. Medicaid covers the children and poor. Everyone else needs to get off their butt and get a job no matter what color they happen to be.

Starik
Starik

@waitaminute3210 @Starik  A lot of people simply can't do it, through no fault of their own. As for the criminal, addicted and lazy we taxpayers foot the bill. Make everybody pay a share of single payer.

waitaminute3210
waitaminute3210

@Starik  "A lot of people simply can't do it, through no fault of their own."

Please give some examples to demonstrate they are not in the "lazy" category.  Because, if single payer were to happen, those same people would have to pay their fair share like everyone else.. 


Starik
Starik

@waitaminute3210 @Starik  Half the people in the country are on the wrong side of the IQ bell curve. They can't make much money. notwithstanding Trump (but he had a big head start with his inheritance). People have disabilities and can't work. People have addictions and can't work. "Fair share" is based on how much money you make. For some folks, that might be a $5 copay, waivable. 

WalterEgo
WalterEgo

@waitaminute3210 @Starik We haven't raised the minimum wage from $7.25 an hr since 2009.  The minimum wage in 1997 was $5.15 an hour!  (not


This corporate welfare results in a minimum wage so low that ONLY through the federal government can these individuals afford any sort of healthcare.  


When Republicans lead to pass a minimum wage increase it will be the first time they have done so.  Pay a livable wage and IF so then you can be outraged when people don't live on it.  


http://www.epi.org/publication/minimum-wage-workers-poverty-anymore-raising/


Otherwise, quit moaning about paying for healthcare for people in poverty because 1) Ronald Reagan signed the law that insisted all patients who enter the ED with injuries are seen, and 2) the people can't afford food an d housing much less healthcare thanks to Republican-led corporate welfare.

waitaminute3210
waitaminute3210

@Starik  I gave you a valid link to show you that half the population is NOT below the average IQ. A little more than 10% is below the average IQ. But, since that isn't in line with making your argument, you willfully ignore it. Got it.

Starik
Starik

@waitaminute3210 @Starik  I see what you're saying, but it doesn't invalidate my point - which is that a large part of the population doesn't have the mental ability to get a (real) college degree and land a well-paying job. Truck drivers, taxi drivers, and a whole lot of factory workers will be robots very soon. 

waitaminute3210
waitaminute3210

@Starik  If I prove what you're saying is false, then yes, I have invalidated your point. You can't make a false point, then add in what you think will happen with FUTURE JOBS, then say this is why people are not currently employed. Talking in circles doesn't equate to credibility. 

SGTGrit
SGTGrit

It's really very simple folks with an economy that now has a debt to GDP ratio exceeding 100% we can't afford a single payer healthcare system. We must turn our attention to juicing the economy and increasing productivity. Stumbling along with a GDP average far below 3% GDP while piling up massive debt as we did during Obama's failed presidency cannot continue. You may dislike or even hate Trump but his economic agenda is absolutely necessary for our economy to stabilize and move forward, It may be too little too late but we have to try. We can't continue down the road we've been traveling any longer.

Starik
Starik

@SGTGrit  No, Sarge, Trump's agenda is for the benefit of Trump and his family. We can certainly afford a serious, non-partisan study of single payer systems to see if we can afford it. I think we can. 

breckenridge
breckenridge

@SGTGrit 


If you're talking about the GOP tax plan juicing the economy, that is a best a dubious outcome.

The upper middle class will a hit from the proposed plan, but the top 1% will benefit greatly. And since the top 1% already have every material thing their little hearts desire, they will not spending their windfall on planes, trains, automobiles or any other material goods.

waitaminute3210
waitaminute3210

@Starik No, we can't. Please show me a country when they have single payer healthcare without drastically increasing taxes on everyone, including the poor. There isn't one.

Starik
Starik

@waitaminute3210 @Starik  "drastically." Got a link? Wouldn't you like to pay a little more in taxes than pay a premium to a predatory insurance company? 

waitaminute3210
waitaminute3210

@Starik I will look for the link, but to answer your question, no I would not like to pay more in taxes. The government isn't as efficient as you think it is. 

waitaminute3210
waitaminute3210

@Starik So, you're saying all the sites that say that citizens of those countries pay up to 45% in taxes to have universal health care are wrong? You're saying you've never seen those facts? 

Starik
Starik

@waitaminute3210 @Starik  Vermont. I say study systems that work, as the European systems do. National governments can control costs. States can't.

waitaminute3210
waitaminute3210

@Starik I've proven my point over and over. Nothing more I can do if you won't be objective and listen. 

Starik
Starik

@waitaminute3210 @Starik  Would you oppose a nonpartisan study of European /Canadian/UK systems, and proposing a system for us? Really study the costs, without lobbying from those who profit from our current system? Your links don't address the issue. One is doubtful, the other is inapplicable. 

WalterEgo
WalterEgo

@waitaminute3210 @Starik Cost to run Medicare = 3%.  Cost to run private insurance company and pay CEO = 21%.  Can the right read a balance sheet?

waitaminute3210
waitaminute3210

@WalterEgo  It is a proven fact that Medicare is not structurally comparable to private insurance. And you're making up administrative costs. This has been addressed before. If you can't understand or be truthful, don't waste people's time. 

waitaminute3210
waitaminute3210

@Starik  I've given you link after link on universal healthcare in other countries and you refuse to admit the truth. I've given you a link showing your lie about how many people fall under the normal IQ curve and you refuse to admit that as well. You're out in the ozone. 

WalterEgo
WalterEgo

@waitaminute3210 @WalterEgo


Do you bloviate often, waitaminute3210, and do you have a policy that covers your annoying condition?



What does "structurally comparable" mean?   Isn't universal healthcare by definition not structurally comparable?  Is "structurally comparable" what people say when they don't have any facts or argument to put forth?


http://www.commonwealthfund.org/publications/in-the-literature/2002/oct/medicare-vs--private-insurance--rhetoric-and-reality


I was wrong.  1.4% not 3% goes to Medicare operating costs.  17.4% to private insurance.  Medicare is only 1200% cheaper to operate than private insurance with (see link above again) better pt. satisfaction and outcomes.  


http://www.politifact.com/truth-o-meter/statements/2017/sep/20/bernie-s/comparing-administrative-costs-private-insurance-a/


Please, bloviate away.  Ive got a cure for that.