Those fiscal geniuses in the White House and Republican-controlled Congress have managed to do the impossible: Their sabotage of the Affordable Care Act will lead to 6.4 million fewer Americans with health insurance, while the federal bill for coverage rises by some $33 billion per year.
Also, by the way, premiums in the individual market will rise by an average of more than 18%.
These figures come from the Urban Institute, which on Monday released the first estimate of the impact of two GOP initiatives. The first is the elimination of the individual mandate, which is an offshoot of the GOP tax-cut measure signed by President Trump in December. The measure reduced the penalty for not carrying insurance to zero as of next Jan. 1.
Those affected by these large premium increases would be disproportionately middle-income people with health problems.
The second is Trump's plan to expand short-term insurance plans, which don't comply with many of the ACA's essential benefits requirements and allow insurers to reject or surcharge people with preexisting medical conditions or histories.
The Urban Institute broke down the impact of Trump and Republican policies thusly:
-- Eliminating the individual mandate, combined with such lesser acts of vandalism as eliminating cost-sharing reduction payments to insurers last year and eviscerating the outreach and advertising budget for the 2017 ACA open enrollment period: 6.4 million more people uninsured than under previous law, as the uninsurance rate climbs to 12.5% of the nonelderly population from 10.2%.
-- Expansion of short-term non-compliant policies: 2.5 million more Americans without minimum essential coverage. Short-term policies, which were limited under the Obama administration to three months maximum and no renewals, would be expanded under Trump to last up to a year. Under the law, short-term policies don't count as real Obamacare insurance.
-- Premiums in the individual market: Higher by 18.2% in 2019 in "full-impact states" (41, plus the District of Columbia, which allow short-term policies under some circumstances.) Eight other states prohibit or limit the expansion of short-term policies, so their premium increases will be lower on average. Nationwide, premiums will rise by 16.4%. In Texas, North Dakota, Alabama, Nebraska and Arizona, the increases will exceed 20%.
-- Because government premium subsidies rise in tandem with premium increases, the cost of subsidies borne by the government will rise by $33.3 billion next year, or 9.3% — to $391.4 billion from $358.1 billion under existing law.
The mechanism by which the GOP policies will crater the individual insurance market isn't hard to understand. Both major initiatives — eliminating the individual mandate and offering bare-bones policies — siphon younger, healthier consumers out of the individual market.
David Anderson, a health insurance expert at Duke University, understands why short-term policies will look like a good deal to young consumers feeling hale and hearty. Others, such as with preexisting conditions, won't even be eligible to buy those plans, guaranteeing that higher-risk patients stay in the ACA pool. Anderson posits a 23-year-old earning $35,000. That consumer would think a full-scale Obamacare plan is a good deal only if he or she has "a significant medical history or reasonable probability of pregnancy."
The economically rational response for the healthy in that segment would be to pay $100 or less a month in premiums and barely use any services over the course of the year. The danger, of course, is that anyone can get hit by a bus or find themselves holding an unexpected cancer diagnoses. Then they're screwed.
"Those affected by these large premium increases would be disproportionately middle-income people with health problems," the Urban Institute researchers said. That's because "they prefer health insurance that covers essential health benefits, are unlikely to have access to medically underwritten short-term limited-duration policies, and are not financially protected by the ACA's premium tax credits."
Millions of others, including the U.S. taxpayer and families who need treatment and have incomes too high to be subsidized, is also screwed. That includes families with household incomes approaching or exceeding 400% of the federal poverty line: $48,560 for an individual and $100,400 for a family of four.
The damage estimate can't be restricted to the immediate impact on individuals and families, the researchers observed. "As healthier enrollees exit for short-term plans, insurers will by necessity reexamine the profitability of remaining in the compliant markets. This may well lead to more insurer exits from the compliant markets in the next years, reducing choice for the people remaining and ultimately making the markets difficult to maintain."
In other words, the Republican sabotage will continue to undermine health coverage in the U.S. The only alternative, it becomes clearer with every day, is some form of single-payer, Medicare-for-all coverage. That's increasingly becoming part of Democratic Party orthodoxy, and it's about time.
