A photo illustration of financial stress.

There is little doubt that the drivel that spews out of President Donald Trump’s mouth on a daily basis will easily eclipse the politically powerful results of a report to estimate the effects of terminating payments included in the Affordable Care Act (ACA) called cost-sharing reductions (CSRs).

A request by House Democratic Leader Nancy Pelosi and House Democratic Whip Steney Hoyer to the Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) produced some stunning numbers on how how bad Trump’s medicine will be for many helped by CSRs.

The violence and death over the weekend when alt-right, neo-Nazi advocates clashed with anti-Nazi, anti-white supremacist protesters in Charlottesville, Virginia, will drown out what the CBO and JCT found out will happen to the federal budget, health insurance coverage, market stability, and premiums if CRS payments end after December 2017, as could happen if Trump uses his executive power to further sabotage the ACA more than he already has by cutting CSRs off.

How important are CSRs? Very important since they represent repayments insurers receive for subsidizing the deductibles, copayments, and other means of cost sharing to those required by law to purchase healthcare plans. The size of CSRs depend on an individual’s income. Insurers receive federal payments arranged by the Secretary of Health and Human Services to cover the costs they incur because of that requirement.

Overall Effects

As a result of the increase in total subsidies under the policy, CBO and JCT project uncomfortable outcomes compared to what would occur if the CSR payments were continued:

  • The fraction of people living in areas with no insurers offering nongroup plans would be greater during the next two years and about the same starting in 2020;
  • Gross premiums for silver plans offered through the marketplaces would be 20 percent higher in 2018 and 25 percent higher by 2020—boosting the amount of premium tax credits according to the statutory formula;
  • Most people would pay net premiums (after accounting for premium tax credits) for nongroup insurance throughout the next decade that were similar to or less than what they would pay otherwise—although the share of people facing slight increases would be higher during the next two years;
  • Federal deficits would increase by $6 billion in 2018, $21 billion in 2020, and $26 billion in 2026;
  • The number of people uninsured would be slightly higher in 2018 but slightly lower starting in 2020.

What should be alarming for everyone, especially Republicans fixated on debt and deficits like Ohio Gov. John Kasich, a fan of a balanced federal budget in spite of terrible consequences, and Ohio Congressman Jim Jordan, a member of the House Freedom Caucus whose hallmark is its opposition to raising the debt ceiling to accommodate congressional spending, an increase in the federal deficit by $194 billion from 2017 through 2026, on net, should make them quake in their conservative boots.

  • 18-20 Ohio counties could be left with no insurer at all in 2018, leaving Ohioans in those counties with no ability to purchase insurance.
  • 66,000 Ohio customers will lose their current insurance plan – 44,000 on exchange, and 22,000 off exchange.

One insurer, Anthem, said uncertainty caused by plans to repeal the Affordable Care Act and President Trump’s repeated threats to stop CSRs are reasons for its decision to exit the exchanges in Ohio.

“By refusing to include a measure guaranteeing the continued payment of the Affordable Care Act’s cost-sharing reductions in the new fiscal year 2017 spending bill, the Administration and congressional Republican leaders have endangered health coverage for millions of Americans,” Ohio U.S. Sen. Sherrod Brown said.  “They will bear responsibility for the premium increases, marketplace disruption, and coverage losses that will likely result.”

Ohio’s other senator in Washington, Rob Portman, has been mealy mouthed as usual about continuing CSRs even though his underlying goal is to repeal and replace Obamacare. Portman thinks like the president that “Obamacare isn’t working for Ohio families and small businesses.” Portman voted to pass the so-called “skinny” ACA repeal bill unlike Brown, who voted to kill it.

 

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