Quote of the Day: ‘If Obamacare is hurting people, why shouldn’t it hurt the insurance companies?’

Quote of the Day: ‘If Obamacare is hurting people, why shouldn’t it hurt the insurance companies?’

The speaker is no less than the President of the United States, and he posed his rhetorical question in a tweet earlier this morning.

Donald Trump also threatened on Monday to cut off funding for Obamacare subsidy payments, echoing a statement he made Saturday as he continues to push Congress to repeal and replace Obamacare.

His full tweet also raised the question of why Congress should not be paying what the public pays for health insurance, which if it ever became a rallying cry would quickly silence opponents to taking any steps toward repealing and replacing the so-called Affordable Care Act.

The president threatened members of Congress Saturday, warning lawmakers that if they fail to pass a bill to repeal and replace Obamacare, he will quickly put an end to federal funding for Obamacare subsidies.

The Trump administration is funding these subsidy payments on a month-to-month basis.

Insurers are required under the current system to provide subsidy payments, commonly known as CSRs, to low- and moderate-income individuals that participate in the state exchanges. To make consumers put more “skin in the game,” Obamacare effectively raised deductibles to levels that are tough for many Americans to meet without some financial support. CSRs were instituted to help insurers with the costs of the deductibles that patients can’t otherwise meet.

Individuals making $30,000 a year would have trouble paying a roughly $6,000 deductible that is common under the current system. Federal subsidy payments ease the burden on low income consumers and allow them to participate in the state exchanges. These payments also provide insurance companies with a sense of security when offering plans on the exchanges.

As insurance providers have dropped out of, or greatly reduced their exposure to, the Obamacare state exchanges, they repeatedly note as a primary reason their uncertainty as to whether the Trump administration will continue to pay out these subsidies. The federal government is slated to pay out $7 billion in CSRs in 2017 and $10 billion in 2018.

The problem for Trump and the Republican leadership is that if the president decides to stop funding the program for 2017, he puts insurers who are already paying out billions in CSRs in hot water, leaving them without any chance of reimbursement from the federal government.

Due to the way Obamacare is structured, if Trump chooses to not reimburse insurers for CSRs, insurers would be forced to increase plan premiums. These companies will not simply eat the difference between what the enrollee pays and what they are left to cover. The excess cost will be shifted to the larger consumer base through higher premiums.

Premiums in 2018 are already expected to increase by double-digit percentages, but abruptly ending funding for Obamacare subsidies is likely to cause them to skyrocket even more.

This report, by Robert Donachie, was cross posted by arrangement with the Daily Caller News Foundation.

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LU Staff

LU Staff

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