Healthcare

Trump Cuts Off Obamacare’s Cost-Sharing Subsidies

Written by SK Ashby

After threatening to do so for months, Trump has finally cut off Obamacare's cost-sharing subsidies for insurers that keep premiums stable for all patients regardless of which insurer they use.

The Trump regime made the announcement very late last night while millions of people were watching playoff baseball, and I don't think that's a coincidence.

Trump has made the payments, guaranteed to insurers under Obamacare to help lower out-of-pocket medical expenses for low-income consumers, each month since taking office in January. But he has repeatedly threatened to cut them off and disparaged them as a “bailout” for insurance companies. [...]

Shares of hospitals and health insurers fell in premarket trading on Friday after Trump’s decision. Shares of Anthem Inc, Molina Healthcare Inc, Cigna Corp and Centene Corp, which are all offering plans on Obamacare markets for 2018, were all lower.

To be clear, these subsidies are paid to insurers who cover a disproportionate number of low-income sick people. The subsidies are intended to prevent a scenario in which one insurer is forced to charge significantly more money than another insurer because they cover more sick people.

The Congressional Budget Office (CBO) has estimated that cutting off the subsidies will result in 1 million people losing their coverage and those who can still afford coverage will see their premiums rise by 20 percent.

The CBO also estimates that cutting off the subsidies will cost the federal government nearly $200 billion because individual premium subsidies will increase to match the 20 percent higher individual premium rates.

In short, Trump has just made insurance more expensive for consumers and the government for no good reason. He did this out of spite.

States led by California are already lining up to challenge Trump's decision in court.