The
mere threat that Obamacare will be dismantled or radically changed —
either by Congress or by President Trump himself — has persuaded several
big insurance companies to stop selling policies or significantly raise
premiums. The practical effect is that some lower-income and
middle-class families may have no good options for insurance and will
have to spend more on health care.
There’s no new Affordable Care Act yet; the House passed a very bad bill, but the Senate has yet to act. Still, in places like Iowa, Nebraska and Tennessee, companies such as Aetna and Wellmark are so spooked by the uncertainty
that they are considering abandoning the market. Other insurers are
asking state regulators for permission to raise premiums by as much as 53 percent.
This should trouble not just the 12.2 million people who have bought
insurance on federal and state exchanges, but also policy makers, since
Washington may have to spend more on subsidies if premiums go up.
Mr.
Trump, not surprisingly, describes things differently. He claims that
uncertainty in the insurance industry is evidence that Obamacare is
collapsing and needs repeal, not that he and his allies have created the
uncertainty. This is disingenuous nonsense. On the whole, insurance
markets in much of the country are on stable footing and will remain so
if Congress doesn’t do things to undermine Obamacare, according to a
March report by the Congressional Budget Office.
And insurers selling policies under the A.C.A. actually did better
financially in 2016 than in the year before, according to an April
report by Standard & Poor’s.
So, why are insurers fearful and threatening to quit Obamacare or jack up premiums? There are a few big reasons. First, the House passed a bill
this month that would take insurance away from at least 24 million
people by slashing spending on Medicaid and cutting the subsidies the
government uses to help people buy insurance. Second, Mr. Trump has threatened
to stop making about $7 billion in payments to insurance companies to
help lower the cost of co-pays, deductibles and other out-of-pocket
costs for lower-income and middle-class families. If the administration
carries out that threat, insurers would raise premiums by about 19
percent, according to the Kaiser Family Foundation.
Third, insurers are worried that the Trump administration will stop
enforcing the A.C.A. provision that requires people to buy health
insurance or pay a penalty. That could hurt them by reducing the number
of younger and healthier people who sign up.
It
can be hard to feel sympathy for bureaucratic and faceless insurance
companies. After all, they often deny people access to medical
procedures and drugs. But Mr. Trump and his Republicans in Congress have
left them with little choice. They can stay with the exchanges and risk
large losses if elected leaders blow them up, or they can pull out now,
or raise rates, in parts of the country where it is harder to make
money.
What’s
bizarre about the Republican strategy is that it is likely to cause the
most damage where many of Mr. Trump’s supporters live. Rural and
suburban areas are more likely to lose insurers and see big premium
increases if Obamacare goes down, because companies have less incentive
to stay in markets where there are fewer potential customers and where
it is harder to put together networks of hospitals and doctors.
Republicans
might hope that blame for any future problems with Obamacare will fall
on former President Barack Obama and the Democrats. A Kaiser poll,
however, shows that 61 percent of Americans already know where the
fault should lie: with the Republicans who are now in charge. Another poll from Gallup
found that Obamacare became more popular than ever after Republicans
began trying to destroy it. Senate Republicans ought to keep these polls
in mind as they come up with their version of Trumpcare.
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