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During Wednesday's lunch with Republican senators, popular vote loser Donald Trump made a direct threat to insurance companies on the Obamacare exchanges—and a threat to the Senate, too. In essence, he said: If you don't do something, I'm going to destroy this whole thing.
Being okay with Obamacare isn't an option for another reason. Because it's gone. It's failed. It's not going to be around. We pay hundreds of millions of dollars a month in subsidy that the courts don't even want us to pay. And when those payments stop, it stops immediately. It doesn't take two years, three years, one year. It stops immediately. On the other hand, and I have to say this, a yes vote will let senators debate the future of health care and suggest different ways to improve the bill. And we're going to do that today.
That would the cost-sharing reduction payments to insurers that help pay for coverage for lower-income people—millions of them. Trump has been threatening these payments for months, and in fact it's his threats that have caused instability in the markets, that have caused insurers to leave the exchanges, and are driving up premiums.
In case Trump's threat wasn't clear enough, his Office of Management and Budget director (and former Freedom Caucus maniac in the House) Mick Mulvaney spelled it out at a dinner Tuesday night when he was asked by a Blue Cross Blue Shield employee what the White House would do if the Senate fails to pass an Obamacare repeal.
"My guess is you probably won't like it that much," Mulvaney said, adding that the White House has been evaluating options.
"We are looking at the cost-sharing payments on a month-to-month basis. We made them today. We'll make them tomorrow. But I don't think we'll see a long-term commitment from this administration," Mulvaney explained.
Here's what that means for insurers, as explained by Brian Tajlili, director of actuarial and pricing services for Blue Cross of North Carolina. "We're seeing the market begin to stabilize after three years of coverage. […] Unfortunately, the lack of CSR (cost-sharing reductions) funding significantly increases the rates for all ACA (Affordable Care Act) customers." Increased rates mean fewer healthy people buying insurance, requiring insurers to charge even higher premiums to maintain coverage for sick people—and a classic death spiral.
Trump has every intention of destroying Obamacare, and he and his fellow Republicans are going to be the ones who take the blame for that.