By killing the cost sharing reduction (CSR) subsidies has Trump stopped what he has called an "insurance company bailout"? Or, has he created an unfunded mandate?
Obamacare statute requires the health plans to provide cost sharing
reduction subsidies to reduce the deductibles and co-pays in the
individual health insurance market for those who make less than 250% of
the federal poverty level. It is a mandate. Funding a mandate is not a
bailout. In Washington, DC we call failing to fund a mandate an unfunded
The low income people eligible for these
subsidies won't be hurt by Trump's action––they still get their cost
sharing reduction benefits and any increase in their premiums charged by
the insurers as a result of Trump's action will generally get absorbed
by their federally provided premium subsidies.
people in the individual health insurance market who make too much to
get a subsidy––$48,000 a year for a single person and $98,000 a year for
a family of four––have to pay the full premium including the bigger
rate increases Trump's action creates. Ironically, it is the middle
class stuck in the Obamacare market that Trump is hurting by killing the
CSRs. The CBO has estimated that Trump's action will on average increase the cost of a Silver Plan
(which is eligible for the CSRs) by 20% with other plans going up
"a few percent."
How many people buy Obamacare compliant policies and don't get a subsidy for their out-of-pocket costs and their premiums?
to the Kaiser Family Foundation 6.7 million people out of a total of
15.4 million in the Obamacare compliant individual health market do not
get any kind of subsidy. That is 44% of the total market.
He isn't hurting the low-income people––by
law they will get the CSRs while the additional premium cost that occurs
when he fails to pay the insurers for them just gets picked up by
Obamacare's premium subsidy system that caps people's out of pocket
He isn't even hurting the insurance
companies in the long-run by sticking them with this now unfunded
mandate. Yes, they will take a big hit because they aren't getting their
CSR payments in October, November, and December to cover a benefit they
are mandated to provide. But almost all of them can afford to just
bridge themselves into 2018 where they'll just ultimately raise the
rates to cover the cost of providing the CSRs.
really only hurting the middle class stuck in Obamacare, many of whom
came to his campaign rallies complaining of the extraordinarily high
cost of their individual health insurance and wanting Trump to do
something about it.
He has. He just caused their rates to go up even higher.
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