Since taking office, the Trump administration has already taken aim to sabotage the Obamacare marketplaces. First, they cut the Obamacare enrollment period from 90 days to 45. Second, they’ve cut the Obamacare advertising budget by 90% and reduced funding for in-person outreach by 40%. Nevertheless, this has caused Health and Human Services regional branches abruptly pulled out of outreach events they’ve participated in over the last 4 years. Third, they’ve shut down the Healthcare.gov website for maintenance. And finally, Trump has repeatedly threatened to end subsidies to insurance companies who cover the poor. Since Republicans have spent 7 years promising to repeal Obamacare, the healthcare law has become a political football. Recently Donald Trump has signed two executive orders sabotaging the Affordable Care Act. Both these executive orders could undermine President Obama’s signature domestic achievement sending insurance premiums skyrocketing and insurance companies fleeing from the ACA’s online marketplaces.
First, he ordered the government to allow associations of small employers or other membership groups band together and offer their own insurance that wouldn’t have to provide all the essential health benefits required under the law as well as be sold across state lines. The order also directed officials to loosen rules for low-cost, short-term health insurance. Trump claims these changes give consumers cheaper options. But health insurance (and basically everyone else) fear it could shift insurance markets back to their pre-ACA days when healthy people paid less but people with preexisting conditions often found coverage unaffordable.
According to the Brookings Institute, a version of these self-insured association plans first became widespread in the 1980s but they failed in droves because many were undercapitalized. Even worse, these earlier association plans had a history of becoming what the Labor Department referred to as, “scam artists.” And it’s known that some of these low-cost plans cover virtually nothing. The Government Accountability Office reported AHPs were “bogus entities [that] have exploited employers and individuals seeking affordable coverage.” In 1992, more than two dozen states found that these early association plans had committed fraud, embezzlement, and other criminal violations. AHPs also run a greater risk for insolvency when claims unexpectedly exceed their ability to pay and have a long history of financial instability. When a long-standing AHP covering 20,000 in New Jersey became insolvent in 2002, its outstanding medical bills totaled $15 million. Though employers paid their premiums, claims made by them and their workers remained unpaid. And it doesn’t help that even these plans’ strongest proponents want guardrails placed on what groups can qualify. For many associations offer health plans to just about anyone who needs insurance, not just small business owners. You don’t need to be a farmer to join the Farm Bureau and business associations can be open anyone filing a Schedule C tax form. Some even have skimpier qualifications that they’re criticized as “air breather” associations in which the only commonality among its members is need for air for breathing.
So it’s no surprise that insurers and state-based regulators have criticized Donald Trump’s provision as a counterproductive step that could pave way for a new batch of flimsy, poor regulated health plans. states are often well positioned with broad enforcement authority to protect their residents by preventing or quickly identifying and closing down scam health insurance operators, many of whom have long used association health plans to sell fraudulent coverage to hundreds of thousands of unsuspecting consumers. However, unlike large employer plans and Obamacare, Trump’s executive order exempts AHPs from state authority. Thus, severely hurting the states’ ability to protect consumers. Instead, the US Department of Labor would primarily enforce AHPs but without the tools, resources, and culture to protect against fraud. As a result, con artists can potentially use existence of federally approved AHPs to so regulatory confusion in order to avoid state detection and shield themselves from law enforcement. So if you work for a small business that has an association plan, you may not be able to get help from your state insurance department if claims aren’t paid.
Though association plans may work great for small businesses with younger healthier workers, those with older, sicker workers will be charged higher premiums. Should one of these younger healthier employees experience a medical emergency, their insurance may not cover the care they need. In addition, small business owners might be incentivized to fire more medically costly employees to avoid premium increases. At any rate, a medical crisis could be potentially ruinous for small business employees under these plans, particularly if they become uninsured in the process. Furthermore, association plans might give small employers more incentives to reject certain applicants based on medical needs. Meanwhile, those on the Obamacare marketplaces will find their coverage less stable and secure if they have preexisting conditions since their insurance will be more expensive and consist of fewer people. Nevertheless, though association health plans may seem like affordable insurance, they’re actually poorly regulated inferior products that are only low-cost to consumers until something goes horribly wrong. But they also destabilize the insurance market which makes more viable small group and individual insurance more expensive and less accessible to those who need it the most. Such destabilization can result in higher medical costs, fewer options, and less healthcare access in the individual market.
When less regulated association health plans compete with fully regulated markets, they create an uneven playing field that can disrupt markets. People who don’t need to cover preexisting conditions or don’t want to pay community rates gravitate toward the better deals association plans offer, leaving sicker people in the regulated markets and having to pay higher costs. Thus, regulated market insurance prices increase, sometimes causing a death spiral that crashes the market and puts consumers at risk. Kentucky experienced this in the 1990s when it reformed its individual market but exempted association plans from the reforms. Association plan enrollment shot up while regulated market insurers pulled out. Within 2 years the state’s reforms were repealed. Though association plans were only a part of Kentucky’s failed market reforms, they’re still a major reason why the state’s health disaster now serves as a lesson for other states to avoid similar reforms.
Second, Donald Trump signed an executive order ordered the government to stop paying insurance subsidies that allowed low-income people to pay out-of-pocket medical expenses that could be as high as $7,150 for individuals and $14,300 for families. Known as cost-sharing reductions or CSRs, these subsidies drawn from a $7 billion fund had been embroiled in legal and political battles between President Barack Obama and congressional Republicans over whether Congress had authorized the president to pay for them. A recent poll from the Kaiser Family Foundation found that 60% of the public thought Congress should guarantee these payments continue. Most Republicans, however, consider them insurance company bailouts and wanted them to end.
Eliminating CSRs is an inherently unpopular policy does nothing but hurt people and waste money. Without subsidies, insurance markets could quickly unravel. Cutting them will result in insurers issuing premium increases as high as 20-25% by 2018-2020 for anyone using Obamacare. Furthermore, an already fragile Obamacare marketplace at greater risk of a last minute health plan exodus by those who assumed the government would pay these subsidies and feel they can’t take the significant financial losses. This can result in as many as 1 million Americans uninsured next year. 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. According to the Congressional Budget Office, the move will ultimately cost the federal government $194 billion over the next decade. To put it this way, by eliminating CSRs, Donald Trump has enacting a policy where the government spends billions to insure fewer people. And therefore, one that helps nobody and hurts millions.
It’s very clear that Donald Trump’s presidential agenda is destroying Barack Obama’s legacy than trying to replace, fix, or improve his predecessor’s biggest accomplishments. Or perhaps help some of the very people who voted him into office. Though he and the Republicans see Obamacare as a political football, his actions will have immediate and very real consequences for Americans. Real people will be hurt by an administration that has actively decided to make a public benefits program function poorly. All these executive orders do is drain Obamacare of the resources it needs to deliver care to the many millions who’ve signed on to the program. Dividing the healthy from the sick in the name of allegedly expanding choice and driving up healthcare costs for sick people benefitting from Obamacare is an egregious idea that only ruins lives and helps nobody. Though the ACA isn’t a perfect and could use a few fixes, to let it fail simply out of spite is outright cruel.
Healthcare is a human right every American is entitled to and the federal government should guarantee access to all. Nobody should be turned away from the healthcare regardless if they can afford it or who has to pay for it. And if it’s taxpayers footing the bill, so be it. If a medical treatment should save a sick or injured person’s life, nothing else should matter. Because to deny medical care robs Americans of their dignity as well as their life, liberty, and their pursuit of happiness. The fact the United States has a for-profit healthcare system that discriminates against the poor is unconscionable for corporations, politicians, and employers shouldn’t decide who has access. It’s essentially indefensible that Donald Trump and the Republican Party not only think it’s okay to deny people medical care, but they’re also perfectly fine with throwing people off their health insurance. Furthermore, they don’t see any problem with letting the Children’s Health Insurance Program expire and jeopardizing healthcare coverage for 9 million kids. To believe only certain people should healthcare because you don’t want more government intrusion in your life and don’t want to pay for other people’s treatment is extremely selfish, degrading, and dehumanizing to the most vulnerable who need it. The fact the Republicans embrace such pathological ideology that government has no role to guarantee healthcare to its citizens is an absolute travesty. And it’s a viewpoint I find completely indefensible that I can’t respect it as an acceptable political opinion. In the United States, universal healthcare shouldn’t be controversial partisan issue but one every American should embrace wholeheartedly. After all, everyone needs healthcare and it’s the right thing to do. Because healthcare shouldn’t be about politics but people’s lives. Americans deserve a universal healthcare system that is of the people, by the people, and for the people. Not a pay to play system dominated by corporations.