Thursday, August 3, 2017

Is Trump's cat fight with the Senate over health care just spit and fur?

Probably.

Trump has been threatening to not pay the ACA’s Cost Sharing Reductions (CSRs). That would drive premiums sky high for millions of Americans.

BusinessInsider.com reports that 3 states proved that one move from Trump could send healthcare costs skyrocketing for millions of Americans.

California, Idaho, and Arizona joined a growing number of states saying Obamacare premiums could shoot up unless President Trump guarantees important cost sharing reduction (CSR) payments.

Trump has threatened to yank these payments to get Democrats to the negotiating table on healthcare.

These payments help offset costs for insurers to provide low out-of-pocket costs for poorer Americans. If they are pulled, insurers in those three states would be forced to jack up premiums in 2018 to offset the loss in funding.

… insurance groups in Idaho, California, Arizona, West Virginia, South Carolina, Wyoming, and several other states have shown that Trump’s actions could be the biggest source of soaring healthcare costs in Obamacare markets next year.

But many other players are resisting. Sarah Kliff (VoxCare) reports in her daily email that On Obamacare subsidies, it’s Trump versus the world.

The Trump administration has spent months flirting with halting cost-sharing reduction payments, the $8 billion fund that reduces copays and deductibles for low-income Obamacare enrollees.

That ambiguity continues today. Mick Mulvaney, who directs the Office of Management and Budget, told CNN in an interview that the administration continues to review the decision on a “month-by-month basis.”

This is problematic for the Affordable Care Act because insurance doesn’t run on a month-to-month schedule. Insurance plans need to decide really soon what premiums they’ll charge for all of 2018. They would like to know now whether to expect the CSR payments to come through, or if they need to raise premiums to account for a new hole in their budgets.

Insurance companies have spent months now begging the administration to commit to making these payments through the end of next year. This week, though, they got some new allies.

Republican legislators have become more vocal in advocating for CSR payments. Members of Congress expect (rightly so) that premiums would spike if Trump were to cut off the CSR payments immediately — and don’t think their voters would be thrilled with such a development. They’ve begun to push Trump to make these payments, as well as discuss a congressional appropriation for this program in 2018.

“Without payment of those cost-sharing reductions, Americans will be hurt,” Sen. Lamar Alexander (R-TN), who chairs the Senate health committee, said Tuesday.

Senate Republicans, as my VoxCare co-author Dylan Scott writes today, “are scrambling to pass legislation that would take the explosive issue out of the president’s hands, and in the meantime, they are pleading with Trump not to sabotage Obamacare.”

Governors — Republicans and Democrats — want the White House to provide more certainty. A bipartisan group of governors sent the White House a letter Tuesday urging the continued payments. … In Arizona, the largest health insurance plan says it will raise premiums 7 percent if the CSRs aren’t paid — but 0 percent if they are.

So the bottom line here is that if Trump does not pay the CSRs, Americans using ACA for their health insurance will get hit with substantial premium increases - and that would be on the head of the leader of the GOP. But, also, it would likely not play well at the ballot box in 2018. So given the cost to voters and opposition from legislators and state executives, why would Trump keep rattling the insurance markets with his threats?

In answer, John Cassidy (New Yorker) thinks Trump’s Health-Care Threats Are Nothing but Spite and Fury. Other than sating his desire for vengeance, it’s hard to see what President Trump would get out of committing to this confrontation.

In the past few days, senior Senate Republicans have made it clear that they want to move on from Obamacare repeal. “We’ve had our vote, and we’re moving on to tax reform,” Senator John Thune, a close ally of Mitch McConnell, the Senate Majority Leader, said on Monday. When McConnell himself laid out his plans for the final two weeks of this congressional session, he didn’t mention health care.

But one Republican leader—Donald Trump—is still refusing to accept defeat. On Saturday, the President demanded that the Senate vote again on health care, and on Monday he repeated his threat to sabotage the Obamacare insurance exchanges. With right-wing pressure groups, including the Koch brothers’ political network, egging him on, Trump is mulling whether to withhold the payments that the federal government makes to insurers in order to reduce the out-of-pocket costs that low-income policyholders face.

If Trump stops the payments, which are known as cost-sharing reductions, or C.S.R.s, it would be an incredibly petty and spiteful move, with an enormous and serious human cost. By Washington standards, the sums of money involved are small: seven billion dollars this year, according to the Congressional Budget Office. But to those households that benefit from the C.S.R.s, the impact of stopping them would be dramatic.

As anyone who has purchased insurance on an Obamacare exchange knows, the policies often come with sky-high deductibles. According to the health-information Web site HealthPocket.com, the average deductible for a “silver”-level plan is now more than thirty-five hundred dollars for individuals, and more than seven thousand dollars for families.

It might seem unthinkable for a President to treat his citizens as political pawns in this way, and some Republicans are urging Trump not to do so. “Without payment of these cost-sharing reductions, Americans will be hurt,” Senator Lamar Alexander, the chairman of the Senate Committee on Health, Education, Labor, and Pensions, said on Tuesday. Alexander also confirmed that his committee would hold public hearings in September on how to stabilize the individual insurance markets. That would represent a return to the traditional way of making policy on Capitol Hill: call in outside experts, involve the other party, and try to reach a bipartisan agreement. But Trump, despite the stinging setback he suffered last week, doesn’t seem interested in going down this route.

The C.S.R.s are designed to reduce the burden of these costs for those Americans least able to afford them. The payments enable insurers to dramatically reduce deductibles and other out-of-pocket costs for policy purchasers who earn less than two and a half times the poverty line. (For individuals, the income eligibility threshold is about thirty thousand dollars a year. For a family of four, it is about sixty thousand dollars.) Instead of facing deductibles that can run into many thousands of dollars, these purchasers end up paying very little because the federal government bears the cost.

Other than sating his desire for vengeance, it’s hard to see what Trump would get out of committing to this confrontation. Stopping the C.S.R.s wouldn’t persuade Susan Collins, Lisa Murkowski, or John McCain—the three senators who blocked the Senate Republicans’ repeal effort last week—to change their minds. And it would only further sour relations with the Democrats, whose help the White House will need if it wants to pursue other aspects of Trump’s agenda, such as introducing permanent tax cuts and launching a big infrastructure program. Perhaps John Kelly, the new White House chief of staff, who over the weekend placed courtesy calls to the Democratic leaders Chuck Schumer and Nancy Pelosi, will talk Trump out of it. We shall see.

So the insurers are against Trump in this. So are many Governors. And so is the Senate. Given the economic, social, and political consequences of Trump’s threatened actions, all his “spite and fury” may end up being not more than a lot of “spit and fur.”

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