Donald Trump has long predicted the implosion of Obamacare. He just took a huge step to fulfilling his own prophecy.
The White House announced late Thursday morning it would cut off a key Obamacare subsidy that makes copayments and deductibles more affordable for low-income Americans. Trump pulled the trigger on the plan late Thursday night.
Trump has spent months toying with the idea of ending these payments, which are drawn from a $7 billion fund set up specifically to cover these costs. House Republicans have challenged these payments in court, arguing that they were never appropriated in Obamacare and thus being illegally distributed.
There is no question that this new policy is lose-lose-lose for key stakeholders with no upside:
- It will raise Obamacare premiums by an estimated 20 percent in 2018, as health plans have to charge more to make up the lost funds. By 2020, premiums would increase 25 percent due to this change.
- Pulling the plug actually increases the national deficit. As those insurance plans make double-digit rate increases, the government will have to spend billions more on the other subsidies that 10 million Americans receive to purchase that coverage.
- The Congressional Budget Office estimates that this move will ultimately cost the government $194 billion over the next decade.
- The number of uninsured Americans would rise by one million people in 2018, in the CBO’s estimate.
- Insurance companies lose out, too, particularly those that assumed Trump would pay these subsidies and set their premiums accordingly. They now stand to face significant financial loses on the Obamacare marketplaces.
To recap: Trump is enacting a policy where the government spends billions more to insure fewer people.
This is a policy that helps nobody and hurts millions. And that is actually different from the other health care policies Trump and congressional Republicans have pursued.
The executive order Trump signed yesterday, for example, would let…